A fresh dispute has emerged in the sugar industry after the Mehta Group, managers of Sugar Corporation of Uganda Limited (Scoul), formally objected to the possible issuance of an operating licence to CN Sugar Limited.
In a letter dated February 26, 2026, addressed to the chairman of the Uganda Sugar Industry Stakeholders’ Council Rajbir Singh Rai, the company warned that granting a licence to CN Sugar would contradict a subsisting High Court judgment that previously nullified the company’s approvals.
The letter, signed by Suresh Chandra Sharma, regional director for African Operations at the Mehta Group, states that the High Court ruled the earlier approval process for the project unlawful and procedurally defective, and that the judgment remains binding.
According to the company, any administrative action taken in disregard of the court decision could expose regulators to contempt of court proceedings.
Lugazi-based Scoul also raised concerns over zoning compliance within the sugar industry. Under Uganda’s sugar sector policy framework, new sugar mills are required to maintain a minimum distance of 25 kilometres from existing factories to protect cane catchment areas and avoid destructive competition.
The company argues that the proposed CN Sugar factory in Namayingo risks encroaching on established cane supply zones of existing mills and lacks evidence of an adequate nucleus estate and independent out-grower base required to sustain operations.
“The issuance of a licence under the current circumstances would be inconsistent with both the letter and spirit of the court’s judgment,” the letter notes.
Scoul therefore urged the council not to grant CN Sugar an operating licence until there is proof of compliance with the High Court ruling, confirmation that zoning regulations have been satisfied, and verifiable evidence of an independent and sustainable cane supply.
The objection by the Mehta Group comes shortly after Bugiri Sugar Limited also opposed the licensing of CN Sugar, escalating tensions among millers in the region.
However, sugarcane farmers in Namayingo District have expressed strong support for the proposed factory, saying they had already planted large sugarcane plantations in anticipation of supplying CN Sugar.
Farmers say they currently have limited market options and fear heavy losses if the factory is not licensed.
Namayingo district leaders have also backed the project, arguing that it could provide employment opportunities for many young people in the area.
Namayingo LCV Chairman Ronald Sanya said the factory offers hope for youths who abandoned fishing following strict enforcement measures on Lake Victoria by the UPDF Fisheries Protection Unit.
“Our youths were chased from the lake, so CN Sugar factory is the only hope for their livelihoods since we don’t have any other factory in the whole district,” Sanya said.
He added that those opposing the granting of an operating licence were acting in bad faith.
Isa Budhugo, the Busoga sugarcane farmers’ representative on the Sugar Council, said the matter will be decided during a council meeting scheduled for March 13.
“We shall sit as council members and make a final decision on whether CN Sugar should be granted a licence,” Budhugo said.
The outcome of the meeting is expected to significantly influence the future of sugar production and cane marketing in the Busoga sub-region.