Increased Sugar Imports  Hurting  Local Sales – Directorate

Duty-free sugar and increased production have been stated as the main reasons for piled sugar stocks in factories, especially in from Western Kenya.

According to a report from the Sugar Directorate, local stocks of above 11,000 tonnes in the factories increasingly piled up with no sales being experienced. This was between December 12th and 14th. Last month the stocks were below 9,000 tonnes.

The report noted that the opening stocks by all millers on December 13th was 11,208 while the closing stock was 11,923 implying the factories were unable to sell sugar on the said dates.

Agriculture and Food Authority Director-General Alfred Busolo said the movement has been affected by a number of factors including the availability of cheap imports and increased production in factories.

“Local stocks have been affected by duty-free sugar and an increase in production following a slight improvement in raw material,” said Mr Busolo.

The move has also affected the price of the commodity with a 50-kilogramme bag now selling at an average of 3,700 shillings from 3,800 shillings last month.

Traders have also been affected by the influx of sugar in the country, both from imports and local production, forcing them to halt shipping in the commodity from regional countries.

As at last month, the country had imported about 900,000 tonnes of the commodity with most of the consignment coming in from Brazil.

Kenya produces about 600,000 tonnes of sugar a year, compared with annual consumption of 870,000 tonnes. The sugar deficit is usually covered by stringently controlled imports from the Common Market for Eastern and Southern Africa (Comesa) trade bloc.

Kenya has an annual quota of 300,000 tonnes of sugar from Comesa countries to make up for the local deficit.

The Treasury had scrapped duty on imported sugar from outside Comesa in May following a severe shortage of the commodity in the country that saw a kilo of sugar cross the 200 shillings’ mark.

The increased imports, mainly from Brazil, have helped pull down prices to between 100 shillings and 110 shillings a kilo.

Earlier, sugar shortage was caused by drought in cane growing zones that affected crop in the field with the directorate estimating a shortage of 1.9 million tonnes at the end of the last financial year.