Friday, September 23, 2011

(THE EAST AFRICAN) Tanzania to import 100,000 tonnes of sugar

Tanzania to import 100,000 tonnes of sugar
Posted Sunday, September 18 2011 at 13:03

In a move aimed at containing sugar shortages in the country, Tanzania is asking local and international firms to import 100,000 tonnes of sugar.

The government has invited eligible importers to apply for licences to import 100,000 tonnes of sugar for the fiscal year ending June 30, 2012 to cater for the current shortage.Mohammed Muya, Permanent Secretary in the Ministry of Agriculture, Food Security and Co-operatives, told The EastAfrican in Dar es Salaam that the duty-free sugar would be sold in Tanzania for direct consumption and not for industrial use.

“The government will also introduce measures to ensure that the imported sugar is not re-exported to neighbouring countries, which are facing a similar shortage,” said Mr Muya.

Mathew Kombe, director general of the Sugar Board of Tanzania, said the government will issue licences to as many firms as possible. However, he said, no firm will be allowed to import more than 5,000 tonnes. He said the sugar will be imported duty free.

“The Tanzania Revenue Authority will only charge VAT on the sugar imported,” said Mr. Kombe, adding that it will be an offence for an applicant to assign an import permit to third parties.

“In three months to come, importation will resume and I assure the general public that the government will monitor this very closely; those who will fail to import or delay the importation of sugar will be required to return the licence so that it can be given to other importers,” he said.

Meanwhile, the government has announced that it will, in the next six to eight years increase, its sugar output to 700,000 metric tonnes. According to Mr Kombe, with new investments in the pipeline in Coast and Morogoro regions, sugar production will increase to between 200,000 and 300,000 metric tonnes per year.

He said the Bagamoyo Eco-Energy Company, which plans to produce 100,000 metric tonnes a year, is finalising mobilisation of funds. “Before the end of the year, Hansa Africa will acquire land at Kisaki in Morogoro for a sugarcane plantation and a factory,” said Mr Kombe.Another project, Ruhipa in Morogoro, is about to take off, even though a conflict between the developers and the villagers over the land has been dragging on for some time, said Mr Kombe.Currently, there are four sugar factories in the country: Illovo, running Kilombero I and II; Mtibwa Sugar; TPC of Moshi and Kagera Sugar.

The four companies have a total capacity of 300,000 metric tonnes per year and are expected to increase output by between 120,000 and 420,000 metric tonnes in the next five years.

Analysts said that with medium and long term investment plans in place, the sugar problem should end in the next two years.

They said the government needs to encourage the private sector to venture into sugar production, so as to close the current gap and create a surplus for the export market.

“More sugar production will also encourage companies with the means to venture into eco-energy projects and ethanol production, which could substitute for oil,” they said.Mr Muya said that sugar has recently become scarce in some East African countries, leading to skyrocketing prices.

“In Kenya, one kilogramme of sugar has reached about $2.6, while in Uganda it is at $2.3 per kilogramme,” said Mr Muya.

He added, “Unscrupulous business people are now smuggling our sugar into these markets, creating an acute shortage in the local market and forcing up prices.”

The combined shortfall for Tanzania and Kenya alone is about 360,000 tonnes.

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