Sugar Corp imports to come mid October

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The Ethiopian Sugar Corporation, which is the nation’s only sugar producer and importer, is being forced to ship sugar from abroad.
The corporation has assigned a company to handle the import. The shortage has caused some manufactures to suspend operations. “We are going to import the product so we can have a reserve if a shortage occurs during the maintenance period,” Gashaw Aycheluhem, Public Relations head of the Sugar Corporation said.
He said they ordered 700,000 quintals of sugar at the end of the 2016/17 fiscal year to be delivered at the beginning of the current budget year.
ED and F Man, which has experience in the Ethiopian market, is the company which won the international bid to supply the sugar and is expected to deliver the product in October, according to a source.
“We ordered the product because the sugar factories suspended their production for maintenance,” he explained.
The public relation head said that the corporation supplies 569,000 quintals of sugar in the country every month.
Addis Ababa takes the major share via consumer’s associations. They receive 112,000 quintals, while regional distribution is 287,000 quintals. Two hundred food factories which use sugar as an ingredient receive 170,000 quintals every month.
According to the latest study the sugar demand in the country is 6.5 million quintals per year. However, the demand is growing every year because more food processing industries are using it as an ingredient and the population is growing.
As of the end of the past budget year the capacity of sugar production was over four million quintals. The gap has been filled by about two million quintals of imports per year.
“In the 2016/17 budget year we did not order sugar from abroad but we did so in the preceding year,” he added.
In the 2015/16 budget year the corporation ordered 2.9 million quintals of sugar.
New sugar factories are expected to be operational this fiscal year. “The number of sugar factories will be at eight in the current budget year,” Gashaw said. The production capacity will reach 7 million quintals.
Recently the country has exported 44,000 quintals of sugar to Kenya, according to a statement by Girma Amente (PhD), Minister of Public Enterprise at his annual report to the parliament a few months ago.
“The government has taken a strategy to cover the local product and export it in the future,” the public relations head said.
“If we see India, which is the second biggest producer in the world in the cane industry, it imports and exports depending on the market,” he added.
“We are exporting the product at the highest price and import it at a lower cost and this has also contributed to bringing in the hard currency that the manufacturing industry needs,” he explained.
“We exported one ton of sugar at the price of USD 500, but with all expense including the land transport we will pay USD 465 per ton for imported sugar,” he said. “We can save USD 35 per ton,” he added.
A sugar shortage is occurring in the market, and industries have been negatively affected. Some of them told Capital that they received half of their quota.
Gashaw said that the corporation gives a priority to consumers instead of industries when a shortage occurs.