The sudden increase in the volume of imported sugar is threatening the survival of Rwanda’s sole sugar miller, Kabuye Sugar Works, the company’s Managing Director said Thursday.
“It is affecting our sales seriously. We are wondering why sugar prices are going down in Rwanda, yet in other countries in the region the price of sugar is increasing,” Rao Mahakali, the General Manager of Kabuye Sugar Works told Business Times. Rao also suggested that a lot of sugar is being dumped into the country.
Factory sugar prices at Kabuye Sugar Works recently increased from Rwf2,000 per sack of 50 kg, to Rwf3,000.
This was attributed to a 16.9 percent rise in sugar cane prices from Rwf13,000 per tonne last year, to Rwf15200 this year.
Despite a daily capacity to produce between 45-50 tonnes, which represent 65 percent of Rwanda’s demand, Mahakali says his company is falling victim of the dumping of cheap sugar.
Rwanda’s current sugar demand stands at 20,000 tonnes annually and the deficit is largely covered by imports from Zambia, Malawi and Kenya.
An independent survey by Business Times, established that there is also white sugar imports from Thailand though the price is slightly higher than the locally manufactured sugar.
A kilogram of white imported sugar is sold at Rwf1100 while Kabuye-made sugar is sold at Rwf850 per kg.
The rise in sugar imports stems from a recent government decision to scrap the 25 percent surcharge on imported sugar which is used as a raw material, a move that was fronted by the private sector.
According to Mahakali, the current trend is not importation but a sign of illicit trade because the sugar is too cheap.
“We have not been able to sell in the last ten days. We are requesting the government to address the problem,” he said, arguing that the illegal sugar imports are threatening the source of livelihood for at least 5,000 people who are employed by the factory.
“We want an open market that allows the local industry to survive. As a local industry providing employment once we are affected, a lot of people are also affected.”
Owned by the Ugandan based, Madhvani Group, the total production of Kabuye Sugar Works is currently projected to reach 14,500 tonnes this year.
With support from the government, the firm has managed to increase sugar cane cultivation from 200 hectares in 1998 to 2,200 hectares today.
Kabuye Sugar Works largely depends on supplies from out growers cultivating farms on over 2,200 hectares.