Business / Markets
Friday, 16 Sep 2016 16:42 EATmkwamboka@kenyafreepress.com
The sugar industry regulator has said that sugar imports are set to rise by 67 percent this month as Kenya moves to plug a deficit caused by underperforming millers.
The regulator announced the increase as the sugar directorate added that it will import up to 15,000 tonnes this month up from 9,000 tonnes last month to boost market supply after the local millers cut down the stocks held at their factories.
Agriculture and Fisheries Authority (AFA) director general Alfred Busolo said the regulator was acting to curb possible rise in retail prices that could result from the shortage of the commodity.
Mr Busolo added that they are going to import between 12,000 and 15,000 tonnes at the end of this month so as to address low stocks that come from the factories.
The ex-factory price of sugar has risen marginally to an average Sh4,600 per 50 kilogramme bag from Sh4,400 in July. However, the retail prices remain unchanged with a kilo going for Sh125.
The millers, especially public-owned ones, are underperforming and currently producing at half the installed capacity.
Mr. Busolo noted that there is urgent need to privatize these public millers to improve productivity. “You look at the performance and you realize that the private ones are performing well while the state-owned millers are struggling,” he said.
Mr Busolo said the imports will strictly be on need basis adding that no more than what is required would be shipped into the country.
The import quota per permit holders is currently between 500 and 1,000 tonnes of brown (table) sugar, which is largely used for domestic consumption.
Import permits remain active for 45 days. Kenya usually imports its sugar from the Common Market for Eastern and Southern Africa (Comesa) and East African Community member states.
Mr. Busolo said the imports are currently being trucked from Uganda or brought in as shiploads from Madagascar, Malawi and Zambia.
Kenya’s sugar consumption has increased by three per cent in the last one year pushed up by population growth. Statistics from the sugar directorate indicate that consumption stood at 889,233 tonnes in 2015 from 860,084 tonnes the previous year.
The statistics paint a picture of fast rising demand, far surpassing the 800,000 tonnes a yearly estimate. The directorate commissioned a survey to ascertain the current requirement in Kenya.
Production of sugar hit 632,000 tonnes last year from 592,000 tonnes in the previous year, making it the highest production in Kenya’s history. The country is facing a sugar deficit relying on imports from Comesa to bridge the gap.
So far the country has been allocated an annual quota of 300,000 tonnes of duty free sugar from Comesa.
The writer is a journalism student at Moi University currently on internship at the Kenya Free Press, specializing in health, crime and society issues.