A decline in cheap imported sugar in Kenya has turned out as a blessing to Ugandan market whose sugar imports grew 30 times in volumes in the month of February compared to the same period the previous year.
The latest data from the Sugar Directorate reported that the volumes of sugar imported from Uganda stood at 12,000 tonnes in two months to February from 400 tonnes at the same period in 2018.
According to Sugar Directorate Solomon Odera, sugar imports from Uganda could not make it to the Kenyan market in 2018 due to an influx of cheap sugar imports from Brazil which was way cheaper compared to that from Uganda which could not compete favorably in the market.
“The overflow from 2017 of cheap sugar into 2018 made traders reluctant to seek import permits to ship in the commodity as they could make losses on account of excessive cheap Brazilian commodity,” said Mr. Odera.
By the end of 2017, Kenya had in excess of 300,000 tonnes of sugar, which was way above the required volumes; an equivalent of the annual quantities that Kenya is allowed to import from the Common Market for Eastern and Southern Africa (Comesa).
However, with the sharp decline of imported volumes and reduced local production, traders are now shipping in more of the Ugandan sugar into the country.
In February Comesa countries provided 16,740 tonnes of sugar while the EAC shipped 6,128 tonnes (all being from Uganda), whereas the rest of the world countries’ imports were 4,507 tonnes.
Increased volumes from Uganda can also be attributed to Tanzania’s move in banning the imports of the commodity from Uganda, leaving Kenya to enjoy all the surplus from the neighboring state.
“Uganda has had surplus stocks this year and that is why they had to export huge quantities to the country compared with last year,” said the regulator.
Kenya opened the window for duty-free sugar last year to allow the importation of the commodity outside the regional market to address the shortage occasioned by scarcity in 2017.