Patrick Mayoyo
15 April 2004
Nairobi — Kenya risks losing its sugar quota to the European Union, unless it confirms its ability to deliver 10,726 tonnes to Portugal by next month, the Nation has learnt.
A letter from the Kenya Sugar Board's marketing agents in London, ED & F Man Sugar Ltd, says that a meeting of the African Carribean and Pacific (ACP) London Sugar Group held last week raised concern about Kenya's progress in delivering the sugar to Portugal by May.
"At a meeting today (April 8) of the ACP London Sugar Group, there was concern expressed that no progress seems to be made regarding Kenya's shipment of SPS - Special Preferential Sugar - to Portugal for May arrival in Lisbon," the letter says in part.
The letter says that there is a danger of Kenya losing its EU quota, if it cannot deliver the sugar to Portugal by May.
"In view of the deadline of 30 June 2004 in European Union law, the concern was that if Kenya was unable to ship this quantity (now 10,726), then there wouldn't be time for any other ACP country to arrange the shipment in Kenya's place, and thus the preferential quota would be permanently lost to all the ACP," the letter adds.
Loss of Kenya's sugar quota in the EU would be a big blow to the industry as a ton of sugar in that market sells at $850 per tonne compared to $400 per ton in the world market.
Such a development would also impact negatively on efforts by the Ministry of Trade and Industry to have the current 10,000 tonnes quota increased to more than 30,000 tonnes.
However, when contacted, an official of the Board, Ms Patricia Njeru, allayed fears expressed by their London marketing firm, saying Kenya would meet its export quota to the EU
"We started the sourcing process in December, and we have given the entire 10,726 tonnes quota to Mumias Sugar Company to supply," Ms Njeru said.
But she could not give more details and instead referred the Nation was referred to the Board's chief executive officer, Andrew Otieno, who was said not to be in the office.
The London firm has a result of the concern raised during the ACP London Sugar Group meeting asked the Board to confirm by today that it will be able to supply the sugar to Portugal, in accordance with the SPS contract.
"In order to allow for a possible replacement shipment, I wonder if you could kindly confirm by 15 April that KSB will definitely supply this quantity to Lisbon, Portugal in accordance with the SPS contract, or otherwise, if you would prefer to allow this year's quantity to be reallocated to other ACP suppliers (without prejudice to next year's SPS allocation to Kenya)," the letter adds.
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