THE government has suspended the issuance of sugar import licences and registration of any new sugar import companies.
The government has also lifted the existing ban on exports of sugar from Kenya. The measures is aimed at reducing the sugar over-supply and stabilising market prices.
"No sugar import license will therefore be issued based on these revoked registrations until a fresh validation process is concluded," said Agriculture cabinet secretary Felix Koskei late Wednesday after a meeting with representative from the Sugar Millers Association.
Koskei noted that in the last four months, the country has witnessed unstable sugar situation, with rising stock levels and decreasing ex-factory prices from a high of Sh5,400 per 50kg bag in May 2013 to a low of Sh3,800 per 50 kg bag in August this year.
"This is partly attributed to millers inability to sell their produce putting in jeopardy the livelihoods of nearly six million Kenyans that are dependent on it," he noted.
According to the ministry of agriculture, as at August 13, 2013 the sugar opening stocks were 24.979 tonnes against a required optimal level of 9,000 tonnes. Total imports into the Kenyan market since the beginning of this year is 147,938 tonnes. Out of this 73,243 tonnes is from the COMESA region where Kenya is yet to exhaust her available annual quota of 340,000 tonnes under the safeguard window.
Kenya has an annual sugar deficit of around 200,000 tonnes, which is usually filled by imports from other producers mainly in the Common Market for Eastern and Southern Africa.
The minister further directed that in order to eliminate sale of smuggled or illegally imported sugar in the domestic market, sale of imported sugar at all commercial levels shall henceforth be supported by original valid import documents.
These documents shall include evidence of tax payment, in case of direct importers, or copies of valid import documents including evidence of tax payment and original and verifiable payment receipt with previous seller's details.
Likewise, sale of local sugar at all commercial levels shall be supported by original payment receipt with previous seller's details, Koskei said.
The cabinet secretary said Kenya Sugar Board and Kenya Revenue Authority shall jointly release sugar transiting through the country to neighbouring countries for purposes of confirming physical exit.
"KSB has been directed to strengthen its surveillance capacity and to immediately review the import authorisation procedure to enhance due diligence to ensure that no sugar is coming in through unofficial channels," he added.
He further said the ministry in consultation with the KSB will develop new import regulations with a view to making them more effective.
An in order to introduce sanity in the distribution of sugar in the country, all the eleven licensed white sugar millers were directed to submit the list of their distributors and other customers to the Ministry with immediate effect.
This will enable the government closely monitor the distribution, sale and pricing of sugar to avoid undue market distortions.
All licensed millers have also been ordered to suspend their dedicated distributorships and open up to a larger retailing distribution network.