Just a day after COMESA extended Kenya’s limit on the importation of sugar, shares of the ailing Mumias Sugar Company rose by 6.7 percent.
On Tuesday, Mumias Sugar Company share sold at 1.60 shillings averagely as compared to the 1.50 shillings on Monday. This has made the troubled miller one of the top climbers. COMESA has given Kenya a go ahead to continue restriction of the importation of sugar for one more year.
Yesterday, at the close of business, Mumias Sugar Company had had a turnover of a total of 1.26 million shillings. The company also had a volume of 778,800 shares on the market. There has been deepening financial woes at Mumias Sugar all the yearlong and the share at the firm fell at its lowest and traded at 1.35 shillings per share. On the part of foreign investors, according to Sterling Investment Bank data, there was neither buying nor selling.
The decision by COMESA to give Kenya the mandate to extent her sugar importation restrictions for one year implies that Kenya has up to February 2017 to restructure the sugar sector. This decision was reached at during the 35th COMESA Council of Minister meeting that was held in Zambia.
Kenya, through the extension will now have time to sell off millers that have been making losses continuously. The companies that have been advertised by the government and put on sale are Sony Sugar, Muhoroni Sugar, Miwani, Chemilil Sugar as well as Nzoia Sugar Company. These five millers are owned by the government and they have a debt of more than 100 billion shillings.
The sugar industry in the country has had many tribulations with many stakeholders blaming their woes on the increased importation of cheap sugar from other countries. The cost of sugar production per tonne in the country is also very high as compared to other countries. For instance, the cost producing one tonne of sugar in Kenya is 50,000 shillings while that in Egypt is between 24,000 shillings and 29,000 shillings.
Article by Juma Fred.