Sugaronline Friday Editorial - The Disaster of Drought in East Africa By Meghan Sapp
Published: 08/05/2011, 11:25:00 AM
The drought and famine in East Africa have more to do with the sugar trade than one might expect.
Image: Newly arrived Somalis queue at an emergency food distribution point in Kenya's Dadaab refugee complex. PHIL MOORE/AFP/Getty Images.
Only a person who lives under a rock can legitimately say that he isn’t aware of the devastating famine in East Africa brought upon by years of drought, years of underinvestment in agriculture and a system based on emergency relief rather than on development. Every day the situation is getting worse for the tens of millions of people at risk in Southern Sudan, Ethiopia, Somalia, Kenya and now Uganda.
The UN estimates that more than US$1.3 billion is needed to battle this crisis. In just three weeks, regular UK citizens have drummed up US$69 million. The UK government has put forward US$328 million. The US, South Africa and UAE among dozens of other countries have put money towards relief. Even a Kenyans for Kenya fundraising drive has come up with nearly US$1 million in the past few weeks with more than 250,000 individuals donating.
The UAE, as an example, in addition to importing tons of food for refugees, where camps like the Daabab camps in Kenya built to cater for 90,000 people were instead hosting about 390,000 refugees, are buying goods in Ethiopia before transporting them to the needy in Somalia. Included in those purchases is 25 kilograms of rice, 10kg of wheat, 5kg of sugar, corn, cooking oil and juice for each family in need, distributed by the Red Crescent.
Which means that someone in Ethiopia is doing a rousing sugar trade.
But the drought that has caused the famine in the region means a lot more for the sugar trade than just some aid purchases that may benefit a few savvy sugar traders. And it means a lot of missed opportunity as well. In Uganda, Kinyara Sugar Works has shut down due to a lack of mature cane to crush. The drought that began last year had a harsh effect on cane, meaning that now there is little left to crush. The country’s other two milling companies are still producing, but at seriously reduced capacity as cane scarcity begins to affect them as well.
Already sugar prices in the country have doubled since April and now, in a year when all three of the mills had expanded their crushing capacity to make the country finally self-sufficient, imports will soon be allowed. The Ugandan government has asked for a waiver from the East African Community to temporarily drop the 25% import tax on any non-EAC sugar in an attempt to lower prices.
On top of existing scarcity and high prices, some of the current sugar production is being shipped across the border into South Sudan who no longer has easy trade with the north since its separation last month. Uganda’s Sugar Control Act restricts sugar traders from selling sugar to non-East African countries like South Sudan, except where they have been given a permit. Any person exporting or attempting to export sugar in contravention of any of the provisions of the Act or any of the conditions of any export licence commits an offence and is liable on conviction to a fine not exceeding UGX10,000 or to imprisonment for a period not exceeding one year.
In South Sudan the famine has already hit, and in Uganda the famine is picking up, meaning that do-gooders like the Red Crescent may be on the look for sugar to supply refugees and the starving, but may find themselves without any local supplies or at such high prices that the only ones surviving are the sugar traders.
In Uganda, the government has already sent out a harsh warning to those who may be hoarding sugar, saying that those found to be speculating on sugar by creating a false scarcity will be imprisoned. Period. That is, if the government can find them.
Uganda isn’t the only country whose lack of cane availability has forced mills to shut down. In Kenya, West Kenya Sugar has shut down one of its mills, meaning the halt to white sugar production entirely. Cane deliveries from farmers fell to 1,000 metric tonnes per day from the previous 2,700 tonnes, despite the mill’s capacity to crush 3,500 tonnes with upgrades in the works to crush 5,500 tonnes per day.
In an attempt to get the cane it needs, West Kenya has slashed transportation prices to US$4.28 per tonne from between US$4.54-US$12.09 per tonne previously in hopes of getting farmers to increase supply to the mills. The price paid for cane has also increased slightly, in an effort to stave off the closure of the remaining mill. All in all it means 1,000 casual workers are being let go as well as those on temporary contracts through outside contractors.
In Ethiopia, where the famine has been harsh but not as bad as in neighbouring Somalia where the effects are expected to be worse than the famine in the 1980s that shook the region, the sugarcane seems to be just fine. The focus on sugar, however, and the leases to Indian and other foreign investors for food and commodity production for export has become a focus in the past week. How can a country on the brink of starvation with neighbours faring even worse be producing food for others, but not for themselves?
The finger-pointing of landgrabbing has begun to resurface, with the country’s Prime Minister defending its position saying the country must be developed rather than just be a park. He’s right in every sense, but that’s not how those focused on short-term emergency relief are seeing the situation. Sugar is becoming the target in what could soon become a media blitz, rather than focusing on why these countries are so food insecure in the first place.
Sadly, the opportunity to focus on opportunities for investment, increased production, more jobs and overall development will likely be lost, while savvy sugar traders on the ground in local markets in starving countries are the ones likely to win.