Tanzania will need to import at least 160,000 metric tons of sugar this year to meet a deficit of the sweetener, Togo-based lender Ecobank Transnational Inc. said.
The government will import 120,000 tons of sugar duty-free to ease shortages, The Citizen newspaper reported, citing the Ministry of Agriculture, Food and Cooperatives. The country also banned the re-export of sugar, according to the newspaper.
“They will need to import at least 160,000 tons in 2011 if they are to meet the demand, but they may not be able to do so because other countries in East Africa are also having a shortage,” Edward George, a soft commodities specialist at the bank, said today by phone from London.
Sugar production in the East African Community, which includes Tanzania, will lag behind demand in the 2010-11 season, George said, adding that Kenya and Uganda were also facing supply shortages due to a drought that hurt crops.
Production in the region will be 1.25 million tons in the current season, while consumption is forecast at 1.7 million tons, according to Ecobank’s estimates.
“The quota that some countries in East Africa have to send to the EU has not been filled, partly reflecting that there isn’t enough sugar being produced and consumption in Africa is increasing,” George said.
Some nations in the region have preferential access to the European Union market, with agreements that allow them to ship some sweetener to the 27-nation bloc duty-free.
It’s “very likely” that other governments in the region will take similar measures to those adopted by Tanzania if they need to bring down local prices, though “this will only be short-term,” George said.