Duty-free sugar imports deal millers big blow

What you need to know:

Sugar millers are feeling the pinch of duty-free sugar imports which have left them with piles of unsold stocks
Butali Sugar Company, which has been in the news over the controversy on how it acquired a milling licence, has more than 2,750 metric tonnes of sugar in its stores

Sugar millers are feeling the pinch of duty-free sugar imports which have left them with piles of unsold stocks.

Butali Sugar Company, which has been in the news over the controversy on how it acquired a milling licence, has more than 2,750 metric tonnes of sugar in its stores.

“We have been compelled to crush at least 1,450 tonnes of cane per day down from 1,650 tonnes because we already have a lot of sugar which is yet to be disposed of,” said Butali Sugar administration manager Pratap Keshwala.

He said that sugar prices had been eroded by illegal imports.

Mr Keshwala urged the government to intervene and revoke all licences issued to importers of sugar from the Comesa trading bloc. “Many sugar firms are affected and the situation is bound to worsen,” said Mr Keshwala.

Mumias Sugar Company had earlier raised the red flag over cheap imports.

“These imports have seen the price of sugar reduce despite the exorbitant production cost of the commodity locally,” said Mumias Sugar management director Peter Kebati.

Against politicians

Meanwhile, farmers contracted by Butali Sugar are up in arms against politicians who are calling for deregistration of the company on grounds that it was controversially licensed to operate at its present location.

Former Butali Outgrowers Company chairman William Kopi said that over 60,000 farmers allied to the miller could suffer huge losses should its licence be revoked.

Last week, the Central Organisation of Trade Unions (Cotu) secretary general, Mr Francis Atwoli, said that the milling firm should be deregistered for exacerbating cane poaching in Kakamega County.

Earlier, the Parliamentary Committee on Agriculture, Livestock and Co-operatives had proposed the deregistration of Butali and West Kenya Sugar Company in case it is established that they acquired licences through dubious means.

Mr Keshwala said that Butali had 69,000 acres of land under cane in Kakamega, Nandi, Uasin Gishu and Bungoma counties valued at over Sh400 million.

Records in our position show that West Kenya had not invested in cane development even after acquiring a new mill with a crushing capacity of 3,500 tonnes of cane per day, up from over 900 tonnes in 2005.