The Kagera Sugar Limited has said that the rise in production costs, partly due to the world economic crisis, has made it raise the price of sugar and distribute the item only in Kagera, Mwanza and Shinyanga regions.
Speaking to The Guardian over the weekend one of the company’s top executives, Vincent Mtaki said that the price of sugar in Kagera region had gone up, saying the cause was due to higher costs of producing the item.
Kagera residents have been complaining against high prices whereby one kilogramme is being sold between 2,000/- and 2,500/-.
Mtaki explained that the higher costs were due to the fact that the region was far from Dar es Salaam where many of the production inputs were obtained, unlike other regions which have sugar factories such as Morogoro. It was easier for Morogoro to get raw materials from Dar es Salaam.
"We buy iron, diesel, pesticides and other needs from Dar es Salaam. This contributes to high costs especially during this time of world economic crisis. We are forced to produce and distribute sugar only in the nearby regions, such as Kagera and Mwanza regions to avoid big loss,” Mtaki said.
He said due to the higher costs it was difficult for the company to distribute sugar in other regions at competitive prices.
Mtaki however allayed fears of Kagera people that sugar price will not remain high it will decrease if the inflation rate will drop.
Tanzania experienced sugar shortage last year due to smuggling of the commodity to neighboring countries where the prices were high.
In March last year Prime Minister, Mizengo Pinda called a meeting of sugar stakeholders which agreed to the price of 1,700/- per kilo and directed importation of 50,000 tonnes of sugar to cover the shortfall.
The government issued licenses to 15 companies to import 20,000 tonnes of sugar from the East African Community member states and Southern African Development Community (SADC) countries, the Sugar Board of Tanzania Director General Mathew Kombe.
“When sugar availability became more problematic and the price went up in September last year, the government gave permits to 26 companies to import duty free 100,000 tonnes of sugar from anywhere in the world,” said Kombe.
He said in October last year, after establishing that measures that had been taken would not meet the demand of sugar in the country, the government allowed another 80,000 tonnes of tax-free sugar to be imported.