Sugar board rules out plans for price intervention

SBT Director General Mathew Kombe said in in Dar es Salaam on Wednesday that, “There are no plans to intervene in sugar prices for the time being…the market forces will remain the determining factor in sugar pricing.”  He was commenting on possible sugar price increase in the wake of increased power tariff.

The short term plans, he said would be to increase output in the four producing factories and importing certain amount to cover the deficit while more investments in the sugar sector would provide the lasting solution in the long-run.Mr Kombe said the sugar prices by all factories have always remained stable, attributing the price changes to distribution channels.

He, however, observed that for the imported sugar, the prices depend largely on the commodity value in the world market.  Likewise, sugar prices is likely to remain less unaffected despite power tariff, thanks to alternative energy generated by the commodity’s producing firms. 

“Almost all the sugar factories no longer depend on the national grid…they generate their own source of energy from sugarcane remains,” remarked Mr Kombe.   Effective January 15, this year, the energy regulator approved an electricity price hike of 40.29 per cent for the state-run power firm Tanzania Electric Supply Company (TANESCO), an increase that would affect power users at individual, commercial and industrial levels.

Despite the government interventions few months ago, sugar prices have continued to soar, with prices in some regions, especially those in the borders, reported to have reached 3,000/- a kilogramme. In Dar es Salaam, sugar’s retail prices range between 2,000/- and 2,400/-, per kilo. 

The interventions came following reported incidences of sugar smuggling to the neighbouring countries particularly Kenya and Uganda, which were facing acute shortage of sugar. Such incidences pushed sugar prices up in the local market. 

Tanzania’s sugar consumption is estimated at 480,000 tonnes per annum, but the four manufacturers - Tanganyika Plantation Company (TPC), Kilombero, Kagera and Mtibwa Sugar - have a combine production capacity of only 320,000 tonnes. 

Last year, for instance, sugar demand exceeded 330,000 tonnes at the time when production stood at 250,000 tonnes, creating a deficit of nearly 80,000 tonnes. The balance was covered by imports.

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