Uganda seeks a market for milk in North Africa after a constant trade war with its East African neighbor.

This week, President Yoweri Museveni visited Algeria, where he signed a deal with Abdelmadjid Tebboune to sell agricultural products, including dairy products, and to strengthen cooperation in other areas of agriculture, such asanimal health.

But this came shortly after Kenya closed and then reopened its doors to Ugandan milk powder, citing a decision to protectlocal producers.

During his stay in Algiers, President Museveni said Algeria’s cooperation with the East African Community could createa strong economic development cluster, according to a statement issued by the Ugandan-parliament.

Ugandan Agriculture Minister Frank Tumwebadze said the move would provide an alternative market forUgandanfarmers and milk processors. “They will buy our milk powder, our coffee, our bananas. Then theywill buy our animalhealth products, etc. Farmers, don’t worry about the dairy market anymore. It is tocomplete a value chain standardapproved by the FDA,” said Tumwebaze.

kenya ban

This week, Kenya lifted a ban on Ugandan milk powder that it imposed weeks ago. “We are pleased toannounce to theUgandan dairy industry that the dairy ban has been lifted. I have also had fruitful discussions with Mr Abdi Dubat,permanent secretary in Kenya’s Ministry of East African Community on bilateral issues,” said Rebecca Kadaga, Uganda’sfirst deputy prime minister and minister for the East African Community Affairs.

According to a letter seen by The EastAfrican, dated March 14, and signed by Kenya’s Principal Secretary inthe Ministryof Agriculture and Livestock, Harry Kimtai, the ban had been suspended following bilateraldiscussions.

“Take note that, importation of products under the East African Community protocol refers to goods being imported fromoutside the East African Community while goods traded within EAC are referred to as transfers.The stoppage issuedthrough Kenya Dairy Board letter ref KDB/MD/SED/1VOL.5/58 dated March 6 is hereby suspended to allow for thedairy industry (imports and exports) to regulations 2021 to apply accordingly,” the letter reads.

Protect local farmers

In a March 6 notice to milk importers, the Kenya Dairy Board had said it was moving to protect local farmers from external products, as their output is expected to increase soon.“In anticipation of the long rains, the government hasstopped the importation of milk powders to cushion the industry from surplus production and-low prices,” said MargaretKibogy, KDB managing director. She added that the commission will not issue newimport licenses until further notice.

The letter was interpreted as covering milk from Uganda, although it was not limited to prohibited imports.

shattered hope

The announcement dampened hopes sparked when President William Ruto came to power and announced plans to allowcheaper milk imports from Uganda and process Kenyan milk for international markets.

trade war

Kenya is a major purchaser of Uganda’s milk, with imports worth her US$138.2 million in 2020, but thetrade relationshipbetween the two countries faces several obstacles, and Uganda is a major purchaser ofmilk. are looking for new marketsfor Kenyan market losses.

Tanzania also taxed Ugandan milk in her 2017. Currently, the Democratic Republic of the Congo, South Sudan, Zambiaand Algeria are emerging as new virgin markets for milk, as are the United Arab Emirates,Syria, Japan, Oman, the UnitedStates and Nepal, according to the Uganda Dairy Development Authority.and Bangladesh. Af CFTA

Taking advantage of the African Continental Free Trade Area (AfCFTA), some producers are expandinginto South Sudan,Ethiopia and Malawi.

According to United Nations Comtrade data, Ugandan milk exports totaled $131 million in 2018, of which74% ($96million) went to Kenya.

Processed milk makes up more than 35% of the milk sold in Uganda, according to the DDA.

Uganda’s milk production increased from 2.08 billion liters in 2015 to 2.7 billion liters in 2019, and exportearnings tripledto $135.9 million. Did.

Museveni said Algeria would buy $500 million worth of his milk from Uganda, making it its largest export market.Uganda faces trade disputes with neighboring Rwanda, Kenya and Tanzania over sugar, eggs, milkand tariffs, includingborder closures with Rwanda that lasted until January last year.

Adversarial trade

The trade war between Uganda and Kenya began in December 2019 when Kenya suspended imports ofUgandan milk,especially Rat Her brand.

Kenyan technocrats then proposed his 16% taxation so that Ugandan milk would be expensive in the Kenyan market, butPresident Uhuru Kenyatta rejected the proposal. A ban on Ugandan milk was imposed shortly thereafter, and in July 2020,Kenya followed the Ugandan sugar ban, contrary to previousagreements to increase Uganda’s sugar exports to Kenya.

Kenya sidestepped a ban on agricultural exports to Uganda in late 2021 after Nairobi agreed to lift restrictions on importsof poultry products from neighboring countries. Bilateral talks subsequently settled trade issues in poultry, eggs, sugar andfish, but as soon as he took power, Root said he wanted to lift theban on Ugandan products entirely.

Kenya’s recent lifting of the ban came when Ugandan Finance Minister Ramasan Gugubi and KenyanTrade MinisterMoses Kuria met in Nairobi to discuss the issue.

MoU Algeria

Other memoranda of understanding on education, oil and gas, tourism and trade were signed in Algiers.We have agreed towork together on trade, energy, education, agriculture and counter-terrorism,”Museveni said.

Ugandan exports to Algeria were worth US$2 million in 2020, according to the UN Comtradeinternationaltrade database.