Sugar imports are set to rise by 67 per cent this month as Kenya moves to plug a deficit caused by underperforming millers, the industry regulator has said.
The sugar directorate said it will import up to 15,000 tonnes this month up from 9,000 tonnes in August to boost market supply after the local millers cut down the stocks held at their factories.
Agriculture Fisheries Authority (AFA) director- general Alfred Busolo said the regulator was acting to curb possible rise in retail prices that could result from the shortage of the commodity.
“We are going to import between 12,000 and 15,000 (tonnes) at the end of this month to address low stocks that we are getting from the factories,” said Mr Busolo.
The ex-factory price of sugar has risen marginally to an average Sh4,600 per 50 kilogramme bag from Sh4,400 in July. However, the retail prices remain unchanged with a kilo going for Sh125.
The millers, especially public-owned ones are underperforming and currently producing at half the installed capacity.
Mr Busolo noted that there is urgent need to privatise these public millers to improve productivity.
On need basis
“You look at the performance and you realise that the private ones are performing well while the state-owned millers are struggling,” he said.
Mr Busolo said the imports will strictly be on need basis adding that no more than what is required would be shipped into the country.
The import quota per permit holders is currently between 500 and 1,000 tonnes of brown (table) sugar, which is largely used for domestic consumption.
Import permits remain active for 45 days. Kenya normally imports its sugar from the Common Market for Eastern and Southern Africa (Comesa) and East African Community member states.
Mr Busolo said the imports are currently being trucked from Uganda or brought in as shiploads from Madagascar, Malawi and Zambia.
Kenya’s sugar consumption has increased by three per cent in the last one year pushed up by population growth.
Statistics from the sugar directorate indicate that consumption stood at 889,233 tonnes in 2015 from 860,084 tonnes the previous year.
The statistics paint a picture of fast rising demand, far surpassing the 800,000 tonnes a year estimate. The directorate commissioned a survey to ascertain the current requirement in Kenya.
Production of sugar hit 632,000 tonnes last year from 592,000 tonnes in the previous year, making it the highest production in Kenya’s history. The country is a sugar deficit relying on imports from Comesa to bridge the gap.
The country has been allocated an annual quota of 300,000 tonnes of duty free sugar from Comesa.
Credit: Business Daily