Sun, May 26, 2013 - Page 14 News List

Sudan aiming to sweeten its economy by boosting sugar exports

By Ulf Laessing  /  Reuters, NEAR SOFIYA, Sudan

Despite this, Mohammed al-Jak, an economics professor at the University of Khartoum, said the firm’s 2020 target of 10 million tonnes of output was unrealistic.

“I think a lack of funding and infrastructure will be big obstacles for even to reach half of this goal,” he said.

The expansion plans also come at a time of an economic downturn coupled with global excess supplies. Raw sugar benchmark futures trade about US$0.168 per pound (0.45kg), less than half their peak price reached two years ago.

Harry Verhoeven, an expert on the Sudanese economy at the UK’s Oxford University, said Kenana was posting a profit and was one of the most sophisticated firms in Sudan, but remained a long way from becoming a global player.

He said the Sudanese government was undermining the sector’s efficiency by controlling the main sugar firms, shielding them from competition and pampering them with subsidies.

Analysts say the market gets distorted because the government is guaranteeing the firms a sugar price almost double their production costs, which opens the door for corruption.

In addition, though Kenana says it has hired 4,000 unskilled workers who get free medical care, critics say the sugar industry makes big profits while the mostly poor Sudanese benefit little from it.

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