Fortification of Vegetable oil and Sugar with Vitamin A in Uganda

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The cost comparison of providing 100 percent EAR yearly for each individual through oil and sugar fortification is US$0.050/year for oil, and US$0.265 for sugar; i.e. a five time difference. The higher fortification cost of sugar is from a more expensive type encapsulated powder form of vitamin A. Thus, the fortificant compound of vitamin A for oil (1.7 million UI/g) is equivalent to 510 g/kg vitamin A (1 mg vitamin A = 3333 IU); the price of this compound is US$66.7/kg, so the cost is US$130 per kilogram of vitamin A (66.7/0.51). Likewise, the fortificant compound of vitamin A for sugar (250,000 IU/g) is equivalent to 75 g/kg vitamin A; the price of this compound is US$48 per kilogram, so the cost is US$640 per kilogram of vitamin A (48/0.075). Thus the cost of the vitamin A compounds explains why sugar fortification is more expensive. Sugar fortification will require a larger, yet necessary, investment, because fortified oil will not reach some vulnerable groups. In summary, a higher vitamin A level in oil combined with a lower sugar fortification level is an adequate policy to follow. Now, Uganda must adjust downwards the vitamin A content of sugar, following ECSA guidelines. Using both fortification programs, it would require a combined annual investment of US$ 0.120 per person (US$2 million yearly for the whole country), Uganda will provide almost the total needed amount of vitamin A to almost half the population (46% or 13.3 million persons), who consume both oil and sugar; 60 percent EAR to about 11 percent of the population (3.2 million persons), who consume oil but not sugar; and 34 percent EAR to a fifth of the population (19% or 5.5 million persons), who consume sugar but not oil. In any case, 76 percent of the population (21.7 million persons) will have improved vitamin A status. Although accurate additional amounts must be estimated by nutritional surveys, these figures are a good first approximation. The largest cost in oil and sugar fortification with vitamin A is the fortificant itself, 89 percent and 93-95 percent, respectively. This important ingredient is considered an essential drug in Uganda, and therefore is exempt from the 18 percent value-added tax. However, the National Drug Authority must still audit and certify the manufacturing industries wherever they are, and confirm compliance at importation sites. These processes cost approximately US$30,000/year, which means 1.5 percent of the fortificant cost. Therefore, strategies to reduce these costs, mainly for premix providers, may provide important savings for the whole program. The proportion of the cost for purchasing equipment is very low for oil fortification (around 6% of the total expenditures for the first year of operations, and 0.7% of the yearly cost when capital costs are distributed over a 10-year period). For sugar fortification, the initial investment per factory is about US$120,000, (24% of the annual expenditures of the first year if using the ECSA food fortification formula, or 16% if using the current Uganda formula). The proportions are reduced to 2.4 percent and 1.6 percent of the yearly costs, respectively, when considering the 10- year useful life of the equipment. The estimated cost associated to internal quality control and assurance, including sending periodic samples to external reference laboratories, is within expected figures. An estimated annual cost was US$45,000 for the oil and for the sugar fortification processes. This amount means 8 percent of the oil fortification recurrent cost, and 2-3 percent of the sugar fortification recurrent cost. 48
C. Governmental Investment Both oil and sugar fortification programs are economically viable, and if the total cost is transferred into the product’s price, the increment would be small. However, programs also require government supervision, and should be implemented under a mandatory policy. Therefore, government must invest in strengthening its enforcement capabilities. Table 6.3 summarizes the governmental cost per institution and function. Although the values in this table are approximate, they suggest that enforcing oil and sugar fortification programs would require an annual investment between US$40,000 and US$65,000. These amounts are 2-3 percent of the entire fortification cost (US$2.04 million) of both programs combined. Regrettably, most governmental enforcement costs have come from external international cooperation agencies, and as such, government has not committed to assuming them. This condition reduces the national self-sustainability of these programs. The Government of Uganda must allocate sufficient resources to the different institutions involved in supervising food fortification programs to allow them to assume their new responsibilities. Table 6.3 Estimation of Governmental Investment for Food Control Institution Ugandan National Bureau of Standards (UNBS) National Drug Authority of Uganda (NDA) Chemistry Laboratory of the Ugandan Industry Research Institute (UIRI) Ministry of Health. Dept. of Food Control and Environmental Hygiene Functions • Factory Inspections • Importation Site Inspections • Certification of premix providers • Inspection of premix at importation sites • Analytical support to UNBS and Inspection by MOH Estimated Annual Expenses • US$ 5,940 • US$ 4,800 17 • US$ 23,400 18 • US$ 6,420 • US$11,280 19 • Inspection at retail stores • US$12,000 Total: • US$ 40,440 to • US$ 63,840 17 Most are fixed costs for personnel salaries assigned to importation posts. This amount refers to qualitative tests and delivering samples to a reference laboratory in Kampala (US$400/monthly). 18 This amount is usually paid by the premix manufacturer. 19 It includes 240 samples per year to be analyzed for their content of vitamin A using a HPLC method. UIRI charges US$47/sample. A spectrophotometric method costs US$10/sample. 49
Page 1 and 2:
FORTIFICATION OF VEGETABLE OIL AND
Page 3 and 4:
TABLE OF CONTENTS Executive Summary
Page 5 and 6: EXECUTIVE SUMMARY Fortification has
Page 7 and 8: 2. The Private Sector Cost of Forti
Page 9 and 10: CHAPTER ONE I. Introduction A. Vita
Page 11 and 12: Timeline of Major Fortification Eve
Page 13 and 14: CHAPTER TWO II. Justification for F
Page 15 and 16: HIES data offer opportunities to im
Page 17 and 18: how to target other micronutrient i
Page 19 and 20: Each leads several activities of wh
Page 21 and 22: Micronutrient Producer (Foreign Cou
Page 23 and 24: Technical Committee, with largely t
Page 25 and 26: Table 3.3: Regulatory QA/QC Require
Page 27 and 28: ecome certified, companies submit a
Page 29 and 30: 4. The Laboratory of the Uganda Ind
Page 31 and 32: The Ugandan vegetable oil and fat i
Page 33 and 34: Table 4.1: Uganda Revenue Authority
Page 35 and 36: Mukwano uses a dilution process to
Page 37 and 38: Table 4.2: The Private Sector Plant
Page 39 and 40: Key findings about the prototypical
Page 41 and 42: ) Vegetable oil fortified with Reti
Page 43 and 44: Both managers are relatively new, h
Page 45 and 46: Table 5.1: Ugandan Sugar Imports, 2
Page 47 and 48: Most of the sugar production increa
Page 49 and 50: Percent of Each Mill's Acreage by T
Page 51 and 52: distillation equipment. USCTA repor
Page 53 and 54: 9. The equipment necessary for fort
Page 55: The data suggest that an important
Page 59 and 60: A secondary audience of this study
Page 61 and 62: Terms of Reference For One or Two U
Page 63 and 64: Annex 2: Household Income and Expen
Page 65 and 66: This can be useful information for
Page 67 and 68: Annex 3: Adult Consumption Equivale
Page 69 and 70: Annex 4 UIRI Analytical Laboratory
Page 71 and 72: Annex 5 The GAIN/Uganda Grant One a
Page 73: Annex 6: Comments of What is Not In
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Fortification of Vegetable oil and Sugar with Vitamin A in Uganda

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