August 6, 2014

The government has said the bulk sugar procurement system might start this year after receiving recommendations from key stakeholders on the sub-sector.

Speaking to this paper in a telephone interview, the Minister for Agriculture and Food Security, Christopher Chiza, said at the moment the buyers and traders are still negotiating the best way to have the system put in place.
“They are still looking at ways on how to conduct the business, despite the fact that there is slight misunderstanding between two parties but hopefully they would come with good answer,” said Minister Chiza.
He noted that if things go well, the bulk procurement system would be applicable this year or early next year.
He said once implemented, it would involve stakeholder including the government, traders and owners of sugar plants.
They would be tasked to assess the demand of sugar in case there is shortage arising from closure of factories.
According to the acting Director General of Sugar Board of Tanzania, Lusomyo Buzingo, it is one of the possible options that may be taken by the board to sort out the problem of sugar shortage.
The bulk procurement system has been one of the ways to solve sugar shortage problems when it comes to importing the product, he said. Stakeholders have agreed on the matter and the process is underway to replace the current system, he added.
According to him, the current system of sugar importation involves too many traders and has too many challenges.
Asked whether the board has any plans to set indicative price for sugar in order to make the product stable countrywide, he said, that may be difficult due to the nature of the market economy.
“Our economy is a free market whereby prices of almost all consumer commodities are governed by market forces,” he said.
He also said with the current drivers of the economy it is difficult to introduce “pan-territorial prices for the product”.
On sugar smuggling, Buzingo, who is also the acting Regulatory Services Manager, said the government is always on the fight against smugglers of commodities.
The other agencies which are mandated to undertake checks on the borders have been working hand in hand to ensure that the product does not enter the country illegally.
Sometimes in 2010, the country faced an acute shortage of sugar which forced the government to intervene to ensure there were enough stocks of the product.
Prime Minister Mizengo Pinda allowed importation of the product so as to stabilise the market price that had started to rise.
However, some unscrupulous businessmen seem to be using the loophole for illegal importations. During the rainy season most sugar mills in Tanzania close down business causing shortage.
Tanzania’s annual sugar consumption stands at 480,000 tonnes but the country’s main producers – Tanganyika Plantation Company (TPC), Kilombero Sugar Company Limited and Mtibwa Sugar Estates in Morogoro and Kagera Sugar Limited in Kagera Region — only manage to produce an average of 400,000 tonnes.
Source: The Guardian.