Uganda Sugar Plants’ 2012 Output Is Below Target on Cane Deficit

Uganda’s sugar output by its three top producers fell below target because of a cane shortage, undermining their expansion plans, the Uganda Sugar Cane Technologists Association said.

Production in the 12 months through December was 289,665 metric tons, below the revised forecast of 322,000 to 329,500 tons, Jim Kabeho, the association’s chairman, said today by phone from Jinja, in eastern Uganda. The agency initially projected output of 346,000 tons for the year.

The East African country imports the sweetener for both household and industrial use. The nation imported 72,895 tons for in 2011, according to the association’s website. Uganda’s annual use last year was projected to grow 4.2 percent to 371,744 tons from 356,651 tons in 2011, the association said. The country exports sugar to South Sudan, eastern Democratic Republic of Congo and Kenya and re-ships some imports.

The association represents Kakira Sugar Works (1985) Ltd., owned by the locally based Madhvani Group, which is the nation’s biggest producer of the sweetener, followed by Kinyara Sugar Ltd., which is owned by the Mauritius-based Rai Group, while Sugar Corp. of Uganda Ltd., wholly owned by the Mumbai-based Mehta Group, is the third-largest.

“Kakira and SCOUL had a problem of inadequate cane supply from independent farmers because of competition from new factories in their area,” Kabeho said. “Kinyara had a problem of bad weather and was out of production for two months.”

Production last year was an improvement on 259,405 tons in 2011 because all the plants increased their capacities, Kabeho said. Two plants that aren’t members of the association are estimated to have produced 7,500 tons last year, according to the association’s website.

Further growth in output is incumbent upon the government adopting a blueprint presented to the association for the industry, Kabeho said, without giving details.

Before it's here, it's on the Bloomberg Terminal.