Kenya’s Sugar Production Declined by 40pc in 1H17

Sugar production in 1H17 declined 40.20 percent y/y to 202,023 tonnes from 337,826 tonnes compared to a similar period last year, attributed to the prevailing cane shortage.

This, coupled with elevated demand, pushed the retail price of the commodity higher by 35.19 percent y/y to 146 shillings a kilogram. Similarly, sales in the review period fell 39.16 percent y/y to 201,431 tonnes.

The amount of cane deliveries decreased from 304.79 thousand tonnes in April 2017 to 231.97 thousand tonnes in May 2017.

The sector’s outlook is bleak with below capacity operation in the next twelve months but millers have been allowed to import 150,000 tonnes of the commodity before the expiration of duty-free window outside the COMESA bloc.

According to the Producer Price Index by the Kenya National Bureau of Statistics (KNBS) for the second quarter 2017, the producer price index of food products increased due to rise in prices of sugar, grain mill products especially maize flour, tea and processed milk compared with the first quarter of 2017.

Under manufacture of food, which had the highest weight in the PPI basket, the year on year inflation was 15.93 percent in June 2017.

The Leading Economic Indicator report from KNBS showed that the quantity of coffee auctioned at the Nairobi Coffee Exchange declined from 4,562.82 MT in April 2017 to 1,639.23 in May 2017 while the average auction price decreased from 299.26 shillings per kilogram to 276.43 shillings per Kilogram over the same period.

The quantity of produced tea on the other hand increased from 38,822 MT in May 2017 to 40538 MT in June 2017. The price of processed tea rose from 304.48 shillings to 324.63 shillings per kilogram over the same period.

Milk deliveries to formal processors fell from 37.7 million litres in April 2017 to 36.9 million litres in May 2017.

The average monthly price per kilogram for maize increased from 46.53 shillings in March 2017 to 49.94 shillings per kilogram in April 2017. Bean prices increased from 90.16 shillings to 96.55 shillings per kilogram during the same period.

The volume of vegetable exports decreased from 5,675.427 MT in April 2017 to 7,309.56 MT in May 2017. The value in KSh million of vegetable exports expanded from 1,813.27 to 1,814.03 in the same period.