Rice Traders Decry Trade Ministry's Restricted Import Permits, Citing Market Manipulation

A group of Ugandan rice traders, operating under the Kampala Rice Traders Association, has voiced strong objections to the Ministry of Trade, Industry and Cooperatives. They allege that the ministry has drastically reduced the number of rice import permits, initially granting them to only 20 companies and later adding five more. This move comes despite a pre-existing pool of over 200 companies that previously imported rice into the country.

The traders claim this restricted access has led to significant disruptions, with numerous trucks laden with rice stuck at the Mutukula border crossing with Tanzania since late July. Some of the imported rice is reportedly beginning to spoil, while stocks within Uganda are dwindling, contributing to a noticeable increase in market prices.

Furthermore, the association accuses some of the newly permitted companies, which they say are not regular rice importers, of leveraging their advantage. These companies are allegedly charging other traders substantial fees, reportedly as high as Shs180,000 per tonne, to facilitate imports through their allocated permits. This practice, traders argue, amounts to market manipulation and stifles fair competition.

The issue has escalated to Parliament, where the Deputy Speaker, Thomas Tayebwa, has questioned the Ministry’s criteria for selecting these 25 companies and the subsequent concentration of import access through a select few. Traders are calling for a return to the previous, more open permit system and an investigation into the alleged irregularities in the current allocation process.

When approached for comment, the Ministry’s public relations officer stated that a statement would be issued to address the concerns, but offered no immediate details on the permit allocation criteria or the traders’ allegations. The current situation risks exacerbating rice shortages and further impacting the livelihoods of numerous traders struggling with financial obligations. In 2022, Uganda imported over 344 million kilograms of rice, with Tanzania being the primary supplier.