Sugar importers have asked for two weeks to discuss the new regulations that are to be introduced by the Kenya Sugar Board to regulate the market. The board has proposed new regulations that include punitive penalties for uncustomed sugar like forfeiture of the sugar and non-auction of sugar that has been impounded.
The new regulations include an increased fee for milling license of Sh2 million up from the current Sh100,000. Kenya Association of Manufacturers Mombasa chairman Munit Thabit said the fee is too much and called for more time dialogue. He said the new fee will have a negative impact on the industry.
The board's CEO Rosemary Mkok however said the new regulations are not meant to deter importers from importing sugar but to ensure illegal traders are reigned in. "As a regulator, we are trying to be as facilitative as possible, of course being alive to the needs of the domestic market," said Mkok.
In the new regulations, the board has proposed the scarping of back taxes and fines for culprits. "Instead, we are intending to blacklist and even de-register any importer found to be playing a foul of the new rules," said Mkok. She said the board is also trying to zero in on repackaging of uncustomed sugar adding that the Kenya Bureau of Standards regulations must be observed.
She said some unscrupulous sugar importers use dubious means to import sugar under tax remissions only to repackage the sugar in Kenya and release it to the market. "We are also trying to zero in on sugar that is coming in under tax remissions such as industrial sugar that comes in as a raw material, some of which is being repackaged and is competing with customed sugar in the retail outlets," said Mkok.
However, Coca Cola financial controller Virendra Nagori asked the board to ensure that the crackdown on importers of industrial sugar does not affect the genuine importers who do not repackage it.
The board is trying to introduce pre-import authorisation where it looks at the country's demands and gaps before allowing an importer to import sugar. The country requires about 1,500 metric tonnes of sugar per day meaning the optimal level of sugar that the country should have in the stores per day is about 9,000 metric tonnes, which is about 4-5 days' stock.
However, the domestic stores now hold about 20,000 metric tonnes, which is an oversupply and eventually affects the market prices. Currently, the industry is working at about 30 per cent of the normal market prices.