21 December 2012

Kenya: Millers Say Sugar Shortage Is Artificial

MILLERS yesterday said the current sugar shortage being experienced is a scheme by distributors to cause an artificial shortage to push up prices.

However traders were quick to distance themselves from the claims saying there is no sugar coming from the factories and this is worsened by monopoly in distribution channel.

Sony Sugar managing director Paul Odola in statement said the shortage cannot be blamed on sugar factories.

He said although operations at Sony are not yet back to normal after the recent closure for maintenance the current shortage cannot be blamed on millers.

"Sony had stopped operation for the last seven weeks, we resumed two weeks ago, we are producing sugar though not adequate to the market as we continue building up our stock but shortage is not as a result of companies", said Odola.

He said the company is expecting its regular sales to pick up soon after it resumed its operation.

Odola said the shortage in the market is beyond the explanation of the sugar factories whose operation has not changed. Sony's at its normal operation produces over 6,000 bags of sugar daily.

Mumias Sugar MD Peter Kebati said the shortage is caused by middlemen in the distribution chain.

He accused some distributors and middlemen of buying sugar in bulk from the millers to hoard with intention to create a shortage so that they can maximize on their profits.

"If there is a shortage then it is not on the millers side but I cannot speak to other millers, distributors have tendency to buy sugar in the millers stock so that they can hoard and make more profit, but even with that our strategic reserves is still stocking", said Kebati.

He said last year the firm managed to cut off the shortage by supplying its branded sugar directly to the market and to supermarket.

"If there is shortage it might be caused by other millers and not us, we have been producing our quota as usual and I hope other millers are also doing the same", said Kebati.

Kebati said the current shortage could not be attributed to the millers despite the huge shortage of cane saying millers supplied enough to the market.

Chemelil Sugar managing Director Charles Owele said the shortage is artificial and is meant to cause panic in the market since factories warehouses are still heavily stocked.

He said before closure they produced enough sugar to sell throughout the maintenance period and enough to run for months depending on the demand.

"We might be having a shortage of cane but the operation has not been affected, the sugar shortage in my view is not here nor there", said Owele.

Traders on the other hand blamed the current closure of sugar factories for maintenance as the cause of the shortage.

Sugar has been unavailable in various supermarket shelves with only few none branded and those branded by the supermarkets available at a restricted quantity.

The price has however remained stable retailing at Sh260 per 2 kilo packet for the last six months.

"Where is the sugar, I know the factory with sugar I will surely go there and buy, The factories have denied us Sugar", said Patel Shah of Kericho based Shah distributors.

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