Ugandan President Snubs Sugar Bill That Scrapped Zoning Proposal

KAMPALA (Capital Markets in Africa) – Ugandan President Yoweri Museveni rejected signing a sugar bill that scraps a proposal, backed by large producers, to restrict the area from which millers can source cane.

The president plans to return the bill to Parliament for reconsideration because lawmakers didn’t accommodate the interests of big millers, Parliament said on its website. Legislators passed the bill four months ago, but rejected a proposal to restrict the area from which millers can source supplies to a 25-kilometer (16-mile) radius.

Large producers want so-called zoning enforced amid concerns that allowing mills to be established near each other will lead to competition for cane from independent growers and cause factories to operate below capacity. Lawmakers rejected the proposal on the basis that zoning would deny independent growers competitive prices and could lead to monopolies by big producers.

At least nine sugar factories were established in the past decade, some too close to other plants, according to the Uganda Sugar Manufacturers Association, a lobby group that includes Kakira Sugar Ltd., Kinyara Sugar Ltd., and Sugar Corp. of Uganda Ltd.

Uganda currently has 11 operational sugar plants, according to the Trade Ministry. The country’s output was expected to climb 17 percent to 428,000 tons last year, according to the USMA, which is yet to provide final figures for 2018 and forecasts for this year.

Source: Bloomberg Business News