Sugar producers have raised concern over importation of thousands of tons of sugar using foreign currency contrary to the amount specified by the government, saying the influx threatens local industries.
The influx hinders efforts by the Bank of Tanzania to control unnecessary expenditure of foreign currencies to protect the shilling from depreciating against the US dollar.
A survey by this paper has confirmed that over 242,000 tons of sugar worth USD 157.3 million equivalent to 249.792bn/- have been imported by traders, who claim to be given permits by the government to import only 20,000 tons of the commodity. The cost of importing one tone of sugar is USD 650 equivalent to 1,032,200/-.
Investigations have showed that there are piles of sugar in godowns of Tanzanian industries.
The traders are reportedly acting on a directive given by the Deputy Minister for Agriculture, Food Security and Cooperatives, Adam Malima on May 21st, this year.
Despite being aware of stockpiles in local factories, the Deputy Minister reportedly ordered importation of 40,000 tons of sugar instead of 20,000 tons, as specified by the government.
Local sugar factories include Kilombero and Mtibwa based in Morogoro, Kagera Sugar Company in Kagera and TPC sugar factory in Moshi, Kilimanjaro region.
Some factory owners who talked to The Guardian blamed the deputy minister for allowing importation of 40,000 tons of sugar, raising the total to 242,000 tons.
Bernard Kiula who is the Operations Manager at Mtibwa Sugar factory, said they have 3,000 tons in stock, attributing the pileup to increased imported supplies, selling at cheaper prices.
“We resumed sugar production on June 4, this year, but we have 3,000 tons in stock. We are now experiencing difficulties selling the product compared to previous years,” said Kiula adding: “Our factory has the capacity to produce between 3,000 and 4,000 tons of sugar in two weeks. We have been informed of the presence of cheap imported sugar that affects our local market.”
According to Kiula, local manufacturers normally shut down between February and May every year due to heavy rains that affects production and for maintenance of the factories. He said production resumes in June every year.
He said it was fine for the traders to import sugar during the period local factories shut down, but the trend has continued even when local manufacturers have resumed production.
The influx of imported sugar has affected local manufacturers’ capacity to pay employees and sugarcane farmers.
He explained that in seven months period they produce 50,000 tons. He said they have employed 5,000 people but they also buy raw materials from 6,000 farmers. He said they are supposed to pay suppliers of various materials including spare parts, packaging materials and oil. He added: “We cannot manage to pay all these people if we don’t sell what we are now producing.”
He said sugarcane farmers are paid 8bn/- every season.
Impeccable sources from the Sugar Board of Tanzania said the government has extended importation permits to some of the companies whose permits expired in May this year. The permits have been extended to June 30th, this year, requiring the companies to import a total of 19,166 tons of sugar during the period.
The companies with the amount of sugar to be imported in brackets are Tanzania Commodities Trading Co. LTD (26), TPM (1998) LTD (12) Matunda B.C. LTD (12), East Coast Oils and Fats Ltd (1,292) and New Tradeco Investment (2000) Ltd.
The list also includes, Mohamed Enterprises (T) LTD (8), Decent Investment Ltd (2,116), Rubab Investment Ltd (12), Multi Modal Transport Africa (2), Trade Logistics (EA) Ltd (12), Ngawaiya Stores (100), DRTC Trading Company Ltd (2,522) and Market Makers (T) Ltd (480).
Other companies are Supermarket (910), Power Roads (1,170), A. O. K. Investment (500), B. F. K. Company Ltd (500), Kigwaza Holdings (500), Sofia International (500), Conti Africa Ltd (260), Masooma Supermarket (208), BAKWATA (2,500), Saddique Supper Service Station (1,700) OLAM Tanzania Ltd (832), United Youth Shipping Co. Ltd (494) and EDISABA General Supplies Ltd (1,000).
However, the sugar board has yet to comment on the matter. Reached via telephone, the Acting Director General of SBT, Henry Semwanza refused to comment on the issue, advising the journalist to go to his office.
This reporter went to his office on June 20, 2012, but Semwanza who is also the Director for legal and regulatory affairs SBT was not ready to talk, claiming to be busy preparing materials for the ongoing Parliament meeting in Dodoma.
He requested the journalist to present the questions in writing.
Lack of cooperation from SBT officials has made it difficult for people to know the number of companies given permits to import sugar, and whether they are real traders or not because some were granted permits last year but failed to deliver.
When contacted, the Deputy Minister for Agriculture, Food Security and Cooperatives, Adam Malima asked the reporter to reveal the source of the information.
“Who said this?” asked Malima while insisting the reporter state whether the source has documents to prove that he had given such an order verbally or in writing.
Malima said that in one of the meetings held in June this year, he directed SBT to work out a plan that would reduce sugar prices in the country and not otherwise.
“I met them on June 4th this year and ordered formulation of a system that would reduce sugar prices but they haven’t responded,” said Malima while asking: “So where did I make the other directive…Did I announce it in newspapers or in a meeting which you didn’t attend?”