KAMPALA: Uganda expects sugar production to rise 17 percent this year to 428,000 tonnes, helped by improved rainfall that is likely to boost cane output, an industry official said on Thursday.
The East African country has a small but thriving sugar production sector, with Kakira Sugar Works, Sugar Corporation of Uganda Ltd (SCOUL) and Kinyara Sugar Works the main producers.
Wilberforce Mubiru, secretariat manager at Uganda Sugar Manufacturers' Association, said total production for last year was 365,452 tonnes.
"In 2017, we had low cane supply but now the rains are there, we expect cane production to be significantly higher," he told Reuters in an interview.
"Good weather and good cane supply is the reason we hope this year should surpass last year in terms of sugar output."
Each of the three big factories has a large estate, which accounts for the bulk of supply, usually surrounded by farmers contracted to supplement cane supplies, known as outgrowers.
Uganda has been experiencing heavy rains since early March that have resulted in flooding in some areas. The rains are expected to continue until the end of May.
World raw sugar prices are at 2-1/2 year lows due to oversupply, which Mubiru said had affected the region.
"Already the prices of sugar in Uganda and the region have been going down," he said. "We have sugar which we would like to export to the region but the region is saturated with sugar."
"Because global prices declined, everyone is looking for a market for their sugar and big producers are flooding our region with sugar, this is certainly compounding our problems."
But he said he expected the price slide would be shortlived.
"This cycle doesn't take long, so a forward minded investor won't be deterred by this short-term price movement," he said.
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