17 May 2017

Kenya: Slight Relief for Sugar Users As Imports Hit the Shelves

An increase in imports meant to tame the high cost of sugar has led to a decline in wholesale prices by 21 per cent. Retail charges have, however, only fallen marginally.

A 50 kilogramme bag of the sweetener now retails at Sh7,000 in Nairobi and Mombasa from a high of Sh8,900 last week, the sugar directorate says. Shelf prices have declined only slightly with a two kilogramme packet in some of the major supermarkets now retailing at Sh375 from Sh390 last week.

The Sugar Directorate says 9,000 tonnes of sugar have landed since last week as it moves to plug the deficit following a huge decline in local production.

"Distributors received 3,000 tonnes on Saturday and an additional 6,000 tonnes has been cleared at the Port of Mombasa," said head of the directorate Solomon Odera.

Mr Odera said the directorate expects 100,000 tonnes of sugar between now and the end of July, saying this will drive down consumer prices. "These imports are meant to push down the price of sugar," he said. Sugar production at the local mills has dropped to less than 3,000 tonnes in the last one month contributing to the current crisis.

Last week, supermarkets were hit by a severe shortage that left only one of the Tuskys outlets with the commodity. The directorate accused traders of hoarding the commodity of better prices.

Kenya produces 600,000 tonnes of sugar yearly and relies on Comesa imports to meet the growing demand that is at 900,000 tonnes. The country is, however, allowed to bring in 300,000 tonnes duty-free sugar every year from the trade bloc. The directorate is projecting a shortage of 1.9 million tonnes of sugarcane by the end of this financial year, which will further hurt supply in the market.

The regulator has blamed low production on a prolonged drought, which affected sugar growing zones.

Sugar production dropped by 16 per cent in February this year compared with the same period last year as raw material shortage took a toll on the quantities.


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