TANZANIA: BULK SUGAR PROCUREMENT TO START IN SEPTEMBER

IN a bid to control excessive importation of sugar, the Sugar Board of Tanzania will start bulk procurement of the product next September, after establishing a separate unpaid shares company.

The Board's Director General, Henry Semwanza said in Dar es Salaam last week that the company which will be responsible for bulk procurement will compose of all stakeholders.

"We are looking at an Ewura model bulk procurement system which has assisted a lot to address fuel importation into the country," Mr Semwanza told Business Standard.

Energy and Water Utilities Regulatory Authority (EWURA) introduced bulk procurement of petroleum products over three years ago after establishing Petroleum Importation Coordinator Limited which is a company involved in tendering and choosing the winning bidder to import fuel on a monthly basis.

He said the process of establishing the company is already underway and is involving all stakeholders in the industry which has seen local producers bear the brunt of cheap imported sugar from Brazil, India and Thailand.

"With bulk procurement, we hope to control importation of sugar but also ensure that the right amounts are imported during the low season when our industries are not producing," he said.

He pointed out that SBT and law enforcement agencies are working round the clock to ensure that smuggled sugar is not allowed in the domestic market. "We still have a big problem with smuggled sugar from neighbouring countries but also Asia which is distorting the market," he acknowledged.

Tanzania's domestic sugar producers can only manage over 350,000 tonnes of the commodity against demand which stands at over 480,000 tonnes. Sugar imports have often caused complaints from domestic producers some of whom have frozen plans for expansion because of excess sugar in the market.

"With bulk procurement, we hope also to increase government revenue and check against prices as only one importer will be chosen to order the commodity," Mr Semwanza noted. A giant sugar project in Bagamoyo by Agro Ecoenergy Tanzania is stranded because investors and development banks are worried by influx of cheap imported sugar from Asia.

"We know that countries such as India last year paid their producers an incentive to export sugar which amounts to dumping in our market," the SBT Director General pointed out while assuring local sugar producers that the problem of excess sugar imports will soon be history.

"Our shareholders and development bankers cannot invest massively in this project before the government addresses policy and regulatory issues raised," said Agro EcoEnergy Tanzania Executive Chairman Per Carstedt.

Mr Carstedt said apart from security of land for the project, investors also want to see improved policy on taxation to suit giant project financiers.

The Agro EcoEnergy project is the first new integrated sugar project in Tanzania since 1974. Under Southern Agriculture Growth Corridor of Tanzania, the project is expected to is expected to produce about 130,000 tonnes of sugar, 10 million liters of ethanol and 100,000 Megawatts hour capable of supplying 100,000 rural households.

In its latest annual report, Grow Africa terms the Bagamoyo project as promising and with potential to transform the country's struggling agriculture sector.

"For its part, Agro EcoEnergy Tanzania Ltd is seeking land to establish a modern sugarcane plantation and build a factory for producing sugar, ethanol and power.

In response, the government has piloted a cooperation framework that balances the interests of all stakeholders, striking a win-win deal whereby local communities will receive a 10 percent nondilutable shareholding in the project company Bagamoyo EcoEnergy Ltd," read part of the Grow Africa report.