Kenya lowers barriers to Uganda sugar imports

Politics and policy

Sugarcane harvesting. The regulator’s change of heart is likely to unsettle prices in the market where illegal consignments regularly find their way to the shelves many of retail outlets. FILE 

By ALLAN ODHIAMBO, aodhiambo@ke.nationmedia.com

In Summary

• A regional meeting of industry regulators and tax agencies held in Kampala on Monday resolved to remove the barriers that have slowed trade in sugar in the last three years.
• Uganda has been locked in a trade dispute with Kenya since 2011 when claims emerged that traders from the landlocked State were simply re-packaging cheap Comesa sugar for resale in other East African markets.
• The regulator’s change of heart is likely to unsettle prices in the market where illegal consignments regularly find their way to the shelves many of retail outlets.

Kenya has relaxed its restrictions on Uganda’s sugar in a move that is set to expose local manufacturers to stiff competition.

 

A regional meeting of industry regulators and tax agencies held in Kampala on Monday resolved to remove the barriers that have slowed trade in sugar in the last three years.

Uganda has been locked in a trade dispute with Kenya since 2011 when claims emerged that traders from the landlocked State were simply re-packaging cheap Comesa sugar for resale in other East African markets.

The feud saw Kenya slap a ban on Uganda sugar imports in October 2012 but this was later replaced by stringent vetting of consignments that takes up to three months before shipment permits are issued.

“We committed to review the processes and procedures of issuing licences and permits for sugar imported from Uganda to a maximum of 14 days,” Kenya Sugar Board chief executive Rosemary Mkok told the Business Daily.

The regulator’s change of heart is likely to unsettle prices in the market where illegal consignments regularly find their way to the shelves many of retail outlets.

READ: Kenyan red tape, duties block Uganda sugar

On Monday, the region’s sugar regulators and tax agencies also resolved to fully liberalise sugar trade among EAC states by December 31.

Trade in the sweetener among the EAC member states is presently controlled through administrative measures such as issuance of import and export permits to avoid malpractices such as dumping.

In the present arrangement, member states are required to provide prior proof of surpluses or deficits in production before they can be allowed to make shipments of the commodity, either as exports or imports.

Under the deal reached in Kampala, industry regulators and tax agencies from the bloc agreed to fully open up trade in the commodity.

“We resolved to liberalise the intra EAC sugar trade by December 31 to comply with the protocol of the regional common market arrangement,” Ms Mkok said.

The EAC member countries will, however, share monthly inventories on held stocks as well as production and consumption levels to help stabilise the region’s sugar business.

“It was agreed that sharing of such information will help remove any suspicion that may injure the relationship among partner States,” Ms Mkok said, adding that everything would be done transparently