Post by Brasil Sugar International

Uganda sugar growers warn higher excise duty could cut cane prices and deepen farmer losses By ChiniMandi - June 19, 2026 Uganda’s sugar industry stakeholders have raised concerns over the government’s proposal to increase excise duty on sugar, warning that the move could reduce sugarcane prices and intensify financial pressure on farmers already facing rising production costs. The proposal seeks to raise excise duty from Ugx 100 (US$0.027) to Ugx 200 (US$0.055) per kilogram. The revised rate follows earlier discussions in which farmers and industry representatives opposed a planned increase to Ugx 300 (US$0.082) per kilogram, Food Business Middle East & Africa reported. Despite the lower revised proposal, growers say the additional tax would still have a direct impact on farm incomes and the overall sugar value chain. Julius Katerevu, Chairperson of the Uganda National Association of Sugarcane Growers (UNASGO), said industry groups had pushed for retaining the current tax level because higher duties eventually affect farmers’ earnings. According to him, millers deduct applicable taxes before calculating payments to growers, transferring the impact of tax increases down the value chain. Katerevu, who also heads the Greater Mukono Sugarcane Growers Cooperative Society Ltd, called on the government to introduce measures that protect farmers if tax changes move forward. He urged authorities to also address the 5% sugarcane trash deduction applied by some factories. He stated that many farmers are already operating under financial pressure and that declining sugarcane supplies reflect weakening profitability in the sector. Isa Budhugo, a member of the Uganda Sugar Stakeholders Council, said increasing excise duty could ultimately reduce returns to growers because sugarcane prices are closely linked to sugar market prices. He warned that higher taxation could either push millers to raise sugar prices or lower the amount paid to farmers for cane. Budhugo added that increasing input costs, including fertilisers, agrochemicals and fuel, are already reducing margins across the industry. Industry estimates show the average farm-gate price for sugarcane currently stands at around Ugx 125,000 per tonne, compared with approximately Ugx 175,000 per tonne a decade ago. Robert Atugonza, Chairperson of Masindi Sugarcane Growers Association Limited, said the current pricing model leaves farmers vulnerable to changes in sugar market returns after taxes are applied. According to Atugonza, the proposed additional Ugx 100 per kilogram duty could reduce farmer earnings by nearly Ugx 9,000 for every tonne of sugarcane supplied. Brasil Sugar International (BSI) Website: https://brasil-sugar.com Email: [email protected] WhatsApp USA: +1 248 939 2646

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