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Uganda Tells Sugar Companies to Stop Supplying ‘Speculators’

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Sept. 27 (Bloomberg) -- Ugandan President Yoweri Museveni ordered sugar producers in the East African country to stop selling to “politicians or any other individuals” to curb speculation, amid a shortage of the sweetener.

“The sugar producers should use their own trusted agents who will, faithfully, reflect the genuine market prices, not the extortionate ones,” Museveni said in a statement issued from New Delhi, where he is on a visit, and e-mailed by his office in the capital, Kampala.

Uganda’s sugar output this year may fall 20 percent from a February forecast of about 350,500 metric tons after a drought cut cane yields, according to the Uganda Sugar Cane Technologists Association. Drought reduced output at the nation’s three top sugar facilities, Jim Kabeho, the association’s chairman, said today by phone from Brazil where he is attending a seminar.

Kakira Sugar Works Ltd., the country’s biggest producer and owned by Madhvani Group, was initially projected to produce 165,000 tons this year, according to the agency.

Kinyara Sugar Works Ltd., which is 51 percent-owned by Rai Group, a Kenyan and Mauritius-based agro-forest company, had projected 126,380 tons, while Sugar Corp. of Uganda Ltd., wholly owned by the Mumbai-based Mehta Group, had projected 54,000 tons, the agency said April 5.

“We shall have a shortage of 20 percent because a drought affected production at Kakira, Kinyara and even SCOUL,” Kabeho said. A shortage of the sweetener in the country was worsened by demand from Kenya, Rwanda and South Sudan, he said. The finance ministry waived all taxes on sugar imports for the six months that started Aug. 5 to allow the country to import 40,000 metric tons.

The nation’s consumption of the sweeter was 346,000 tons last year with imports of 130,000 tons, of which 67,000 tons were re-exported, according to the association.

To contact the reporters on this story: Sarah McGregor in Nairobi at Fred Ojambo in Kampala at

To contact the editor responsible for this story: Paul Richardson at

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