Kenyans yet to reap benefits of drop in the global price of sugar
A shopper at a supermarket's sugar section. Consumption has been rising in recent years with population growth. PHOTO | FILE
What you need to know:
The price of sugar in Kenya has hit a six-year high attributed to poor performance of local millers as well as expensive imports.
A 50 kilogramme bag of imported sugar currently lands in Nairobi at Sh5,475 while the locally manufactured sweetener attracts an average of Sh5,500.
The price of sugar in the global market dropped by eight per cent in the last one month, but Kenyans could wait longer before this reflects locally due to long-term contracts between importers and their suppliers.
A monthly sugar price index by the Food and Agriculture Organisation (FAO) indicates that the price of the commodity averaged 262.6 points in December, down 24.6 points (8.6 per cent) in November.
“It is true that the global price of sugar has come down but this will not have an immediate effect on import cost since importers had entered into agreements with their suppliers, which cover a certain period from now,” said Agriculture Food Authority director-general Alfred Busolo.
Mr Busolo said the earliest Kenyans can benefit from low prices is June. The imports, which Kenya relies on to bridge a shortage, have been on an upward trajectory in recent months, which should pile pressure on consumer prices.
A 50 kilogramme bag of imported sugar currently lands in Nairobi at Sh5,475 while the locally manufactured sweetener attracts an average of Sh5,500.
In August, the International Sugar Organisation (ISO) released its first full-scale forecast for 2016/2017, which indicates a looming shortage though.
The price of sugar in Kenya has hit a six-year high attributed to poor performance of local millers as well as expensive imports.
Normally, Kenya imports 350,000 tonnes of sugar from the Common Market for Eastern and Southern Africa to bridge the deficit and also check consumer prices. The importation is done monthly by registered importers.
The country routinely imports 15,000 tonnes every month but the current shortage has pushed up the imports to 25,000.
But even with enhanced imports, the retail price of sugar has remained high with the regulator attributing the trend to expensive imports and a local deficit.
A kilogramme of sugar at supermarkets retails at Sh140 while a two-kilogramme pack goes for Sh280.
Consumption has been rising in recent years with population growth.
Statistics from the sugar directorate indicate that consumption stood at 889,233 tonnes in 2015 from 860,084 tonnes the previous year.
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