Relief for Sugar Industry as Kenya Dials Down on Imported Sugar

Despite the many challenges that were being faced by the ailing sugar industry in Kenya, farmers now have a reason to smile as domestic sugar production has improved enough to warrant a reduction of imported sugar entering the market.

Imported sugar stocks have been cut by 20 percent due to increased factory stocks that are said to have risen above optimum levels, thus the reason for cutting down on the volume of imports.

The country has been importing 10,000 tonnes of sugar on a monthly basis, which have been reduced to 8,000 tonnes. Currently, local sugar factories are holding 12,000 tonnes of sugar.

The move was settled upon as a way of supporting local sugarcane farmers who have improved their farming methods. COMESA had earlier on extended its safeguard on regulating the entry of cheap sugar into the country, which was a positive move on the side of local farmers.

High values of sugar production led to reduced prices on the commodity as the local non-branded sugar was being sold at Sh.100 while the branded one went at Sh.125. This comes as a relief to consumers who have been paying more for the commodity.

Despite the improvement, the production rate of sugar still stands to improve, as stated by the Sugar Directorate. Production cost for a tonne of sugar was estimated to be Sh.57,000 in Western Kenya, as compared to Egypt, where that same quantity is produced at between Sh.24,000 to Sh.29,000.

The high production rate in Kenya has been blamed on the many challenges that the sector has been facing recently.  Kenyan sugar factories have been neglected by the government as most of them still use inferior sugar milling machines.

Globally, 70 percent of the sugar that is produced is consumed in the same country, and only 30 per cent is exported. this becomes an advantage for consumers in the given country since when supply is sufficient, retail prices reduce. This seems not to be the case in Kenya as there are occasional sugar shortages often leading to hiking of sugar prices.

The Kenyan Sugar industry has been facing numerous problems that almost brought it to its knees in 2015. This prompted the country to start importing cheap sugar, mostly from Uganda.

Nzoia, South Nyanza, Chemilil, Muhoroni and Miwani millers are at stake as some of its shares might be sold by the government to the private sector in a bid to raise revenue which will enable the millers to survive as they are in urgent need of modernization. The millers have been struggling to cope with competition from the entry of other sugar producers in the country.

Article by Vera Shawiza.