Bernard Namunane
5 September 2008
Nairobi — The Government has struck at the heart of beneficiaries of cheap sugar imports after setting up a committee to monitor the flow of the commodity into the country from the Comesa region.
Called the Sugar Safeguard Committee, it was given a broad task of ensuring that all players in the industry act in harmony with a view to increase the output of local millers.
The committee will monitor the application of restrictions on duty-free sugar imports, laws governing the sector, implement the Industry Strategic Plan, and intervene punitively should stakeholders flout importation guidelines.
Mombasa Port
Deputy Prime Minister Uhuru Kenyatta gazetted the committee yesterday in the wake of contradictory statements on the amount of available sugar stocks by the Kenya Sugar Board and some millers.
The two differed over the stocks of sugar and the need to let in a consignment that is held at the Mombasa Port.
Agriculture minister William Ruto ruled out allowing in the cargo and promised that measures will be put in place to protect local sugar factories. Friday's gazettement hit the same rhyme as the minister promised.
Mr Kenyatta, the Trade minister, confined the mandate of the committee to sugar safeguard arrangements that allow the Government to limit the duty-free imports to 200,000 tonnes per year.
"The committee will administer and monitor the implementation of the sugar safeguard and all the undertakings on which extension of the safeguard is premised," he stated.
Kenya has since 2000 enjoyed a safeguard aimed at making the local industry more competitive.
The safeguards, which expired in February, have been extended for four years.
The 11-member committee will draw representation from the ministries of Trade, Finance, Agriculture, Industrialisation, Kenya Bureau of Standards (Kebs), Kenya Sugar Millers Association, Kenya National Chamber of Commerce and Industry, and the Kenya Revenue Authority.
Representatives from the Sugar Board, Kenya Sugarcane Growers Association, and Kenya Association of Manufacturers will also sit on the committee.
The committee will bring together the stakeholders and build consensus among them on the import restrictions and ensure that laws that have been passed to streamline the sector are followed.
Following the launch of the Comesa free trade area in 2000, it emerged that Kenya's sugar sector was not ready to compete against imports from other Comesa member states.
Annual average
In 2000, the ex-factory price of a tonne of sugar among Kenya's then seven main sugar millers ranged from Sh38,500 to Sh53,500, rounded off to an average of Sh42,680 per tonne.
In the same year, the landed cost of one tonne of sugar from Comesa FTA countries, Swaziland and other third world countries ranged from Sh17,501 to Sh22,084, with an annual average of Sh19,904.
There are currently seven functioning sugar factories out of which one - West Kenya Sugar Company - is a privately owned.
Mumias Sugar was privatised in the late 2001, but the Government retains 20 per cent of the shareholding.
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