Africa Sugar Digest, Vol. II, No 9, 27 October 2011

Kenya: KUSPAW reaches agreement with Mumias Sugar

A 20 percent wage increase over two years (10 percent in each year), effective November 2011, was agreed by KUSPAW, an IUF affiliate, and Mumias Sugar Company in early October. The new wage rates range from 30,250 to 60,843 Kenyan shillings per month (USD 1.00=KES 99.42). Other benefits negotiated include a housing subsidy of between 4,037- 5,986 shillings for those residing outside the company’s compound, and allowances for workers staying in Nairobi and Mombasa.

KUSPAW also reported that by the end of October managerial staff in Mumias Sugar will join the union, following recently introduced legislation that determines only one employee organisation per sector.

Sugar cane shortage continues Meanwhile, cane shortages continue as a major challenge for the industry. KUSPAW reports that the most difficult situations appear in Butali and West Kenya; Chemelil and Muhoroni, and in Nzoia. In the first two, mills compete for cane from the same catching area, as their factories are located close of one another. The combined installed crushing capacity of Butali and West Kenya is listed at 4,500 tonnes per day, but it is reported that the mills process only 1,800 tonnes. In Chemelil and Muhoroni, with a combined capacity listed at 6,000 tcd, it is reported that they process only 2,500 tonnes per day. In this case, there seems to be some mismanagement of cane operations involved.

Among the main causes for the shortage are the ongoing difficult business relations between farmers and millers, with the former currently pressing for cane prices close to 10,000 shillings per tonne, while millers are said to offer 4,200. As a result of the shortage as well, there is a trend to harvest underage cane, which affects productivity and will create future problems. KUSPAW also says that the sugar policy in place has allowed the establishing of new factories, without properly assessing and securing cane availability. Some of the new factories, which do not own cane, are operating at satisfactory levels by out-bidding the competition.


COMESA sugar safeguards extendedThe Common Market for Eastern and Southern Africa (COMESA) granted Kenya another two-year extension of sugar import safeguards, following government arguments based on the privatisation process of five factories. The new period runs from Mar. 2012 to Feb. 2014, fixing a maximum importation of 340,000 tonnes per year, against an estimated deficit of 300,000 tonnes. The five factories to be privatised are Nzoia, Sony, Chemelil, Miwani and Muhoroni. Kenya has opened the domestic sugar market to imports from COMESA members at a rate of 40,000 tonnes annually, in addition to the 220,000 tonnes agreed in 2007.  (Based on information from Lincoln Aveza, KUSPAW.)

Uganda: New factory in Bulambuli?

In late August , President Museveni commended the Bulambuli district in eastern Uganda for making land available for Indian companies to grow cane and build a sugar factory, and added that the government would provide assistance to the new investors.

Zambia: South African AG-Zam to harvest cane

Last April, the Zambia Development Agency (ZDA) and the AG-Zam, a South African project, signed a Memorandum of Understanding to set up a 15,000-hectares cane plantation in the Kazungula District.  At a reported at USD 251 million, the project will start with 10,000 hectares, and then would add another 5,000. It is said that it will create over 4,000 jobs, as the company will also involve an estimated 3,000 independent small-scale farmers or outgrowers.

EU-ACP-LDC: A new wave of reforms on their way?

European sugar refiners would like to see the European Union abolishing a 98 Euros (USD 137) per tonne duty on sugar imports, to ensure access to raw sugar, it was reported in mid September. Among the exporting countries benefitting from the move are Brazil and Australia. The EU suspended the so-called CXL duty from Dec. 2010-Aug. 2011, and allowed 500,000 tonnes of duty-free imports to face a shortage of sugar.

The European Sugar Refiners’ Association (ESRA) said that factories in the continent are operating “well below” capacity due to the shortage of raw sugar, at a time when refineries have expanded. ESRA said that imports from the African, Caribbean and Pacific (ACP) and the Least Developed Countries (LDC) are estimated at 1.65 million tonnes in the 2010-11 season, below the Commission’s calculations of 2.8 million; and added that imports in the 2011-12 season, starting 1 Oct., are expected to reach 1.7 million, down from an original estimate of 3.3 million.

Meanwhile  the ACP and the LDC groups have expressed their “profound concern and dismay” at the European Commission’s (EC’s) proposals to eliminate sugar quotas in the context of the reform of the Common Agricultural Policy (CAP). Eliminating the sugar quotas from 2015 would “seriously jeopardise” the future of their sugar industries, they said.

IUF Global Sugar: FAWU Gender Workshop in Durban

Twenty women members of FAWU’s sugar sector met from 11-13 October in Durban for a workshop on Gender, which also counted with the participation of two delegates from Swaziland’s SAPWU and Mozambique’s SINTIA. The agenda stressed the importance of integrating a Gender perspective as well as women workers in the union’s sugar work and leadership. The participants discussed Gender Issues, Labour Legislation (Equity in the Workplace Act), the National Sugar Bargaining Council, under which sector-wide negotiations take place, and discussed future work of FAWU in relation to women workers, among several issues. A COSATU officer made a presentation on the confederation’s gender policy and work.

The IUF Global Sugar contributed to the workshop with the participation of the Swazi and Mozambican delegates, who presented their unions’ work with women workers, and with information on Maternity Protection in the Sugar Sector, a topic highlighted in the work of IUF Global Sugar.

The workshop was a joint effort by FAWU-KwaZulu Natal region and the IUF Global Sugar project in East and Southern Africa, under which the workshop was initially agreed at a sub-regional meeting held in Feb. 2010 in Big Bend, Swaziland.

Work with SAPWU in Swaziland – Following the Durban workshop, the IUF Global Sugar Coordinator visited SAPWU in Swaziland. Main efforts by the union are geared towards sector-wide negotiations, to allow coordination and homogenisation of terms and conditions. A visit to the EU delegation in Swaziland resumed the IUF and the union’s contacts around the EU/Swaziland sugar programs under the EU Accompanying Measures for the Sugar Protocol Countries (AMSP).

Africa Sugar Digest is produced thanks to the IUF Global Sugar project in East and Southern Africa. It appears as news becomes available. Contributions are welcome. The IUF African sugar project is supported by the Social Justice Fund of the Canadian Auto Workers (SJF-CAW), with contribution from the Canadian International Development Agency (CIDA) through the Labour International Development Program of the Canadian Labour Congress (LIDP-CLC).

Africa Sugar Digest, Vol. II, No 9, October 2011 – click to download –

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