Com-Watch - Issue 37 - June 2014

COMMODITY NEWS
SUGAR
Government To Introduce Bulk
Sugar Procurement System
The government is contemplating replacing the current sugar
importation system by introducing a bulk procurement system
in case there is shortage arising from closure or dysfunction
of factories. Stakeholders have agreed on the matter and the
process is underway to replace the current system.
According to the Sugar Board of Tanzania [SBT] the current
system of importation involves too many traders and has too
many challenges. Asked if the board plans to set indicative
price for sugar in order to make the product stable SBT
noted that it may be difficult due to the nature of the market
economy.
On sugar smuggling, agencies are mandated to undertake
checks on the borders and have been working hand in hand
to ensure that the product does not enter the country illegally.
Recently, revenue collecting authorities reported the capture
of smuggled sugar in Mbeya and Morogoro regions. The main
challenge are porous borders especially along the coastal line
and at the borders with Malawi and Zambia.
Last year Tanzania imported 50,000 MT of sugar to plug
a deficit that had pushed up the price of the commodity.
Currently, the retail cost of sugar in the country stands at
between 2,000/- and 2,400/- up from 1,800/- last year.
During the rainy season most sugar mills in Tanzania close
down business causing sugar shortage.
Tanzania’s annual sugar consumption stands at 480,000 MT
but the country’s main producers - Tanganyika Plantation
Company [TPC], Kilombero Sugar Company Limited in
Morogoro Region, Mtibwa Sugar Estates also in Morogoro
and Kagera Sugar Limited in Kagera Region - only manage to
produce an average of 400,000 MT.
[The Guardian 26/05/14]
US$550m Tanzania Ethanol Venture
Agro EcoEnergy [Tanzania] Limited, a subsidiary of a Swedish
based firm, has invested US$550 million in sugarcane farming
as part of a power and ethanol project. Agro EcoEnergy has
already set up a special purpose project company, Bagamoyo
EcoEnergy to develop a modern sugar cane plantation and
factory producing sugar, ethanol and power for the Tanzanian
market.
The project will produce 130,000 MT of sugar pa. with over
1,500 sugarcane outgrowers in Bagamoyo in the Coast
Region earning around US$18 million annually when the
project takes off. The Southern Agriculture Growth Corridor of
Tanzania [SAGCOT] is advising the project.
Launched at World Economic Forum Africa in 2010, SAGCOT
is a public-private partnership that aims to boost agricultural
productivity in Tanzania and the wider region, and thereby
achieve the country’s agricultural strategy.
[Daily News 09/05/14]
29