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Sugar Prices To Fall As 21,000 Tonnes Land From Thailand

BY Jane Muia · February 28, 2023 12:02 pm

KEY POINTS

Kenya relies on imports to bridge the local sugar deficit. The country imports the commodity mainly from the Comesa region. Initially, Kenya was allowed to import 350,000 tonnes of sugar from Comesa states but the Treasury lowered this to 180,000 tonnes last year.

KEY TAKEAWAYS

Production of the sweetener sunk significantly to 46,459 tonnes in August last year from the 70,278 tonnes recorded a month earlier. The fall was attributed to the scarcity of mature canes and the closure of most factories for maintenance. 

The price of sugar may drop in the coming days as the ships carrying the first consignment of the duty-free sweetener docks at the port of Mombasa.

The first ship carrying 21,000 tonnes of sugar from Thailand will arrive on Tuesday with the second one expected to dock on Wednesday, March 1.

The government opened an import window in December last year that will see traders ship in 100,000 tonnes of sugar outside of the Comesa region to curb the shortage. The shortage was attributed to a global shortage and a drop in domestic production.

Production of the sweetener sunk significantly to 46,459 tonnes in August last year from the 70,278 tonnes recorded a month earlier. The fall was attributed to the scarcity of mature canes and the closure of most factories for maintenance.  As a result, the price of a kilogram of sugar jumped to around 160 shillings in October from 150 shillings in April.

The Treasury waived the duty to allow traders to bring the commodity outside of the regional market as sugar coming in from other parts of the world attracts at least 50 percent duty under the East African Community’s common external tariff.

Kenya relies on imports to bridge the local sugar deficit. The country imports the commodity mainly from the Comesa region. Initially, Kenya was allowed to import 350,000 tonnes of sugar from Comesa states but the Treasury lowered this to 180,000 tonnes last year.

This followed complaints from Kenyan millers and farmers that the government allows the importation of more sugar than is required, impacting negatively on the local prices.

The Comesa countries are now selling their produce to other global countries especially the European Union where they are fetching better prices, forcing Kenya to seek other alternatives. According to the Sugar Directorate, in the EU Prices are higher by at least $20 per tonne compared to within the region.

Related Content: Looming Sugar Crisis as Shortage Hit Global Market

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