Local millers warn sugar imports threaten industry

Kenya Sugar Millers Association has raised concern over the increased cases of smuggling and dumping of sugar as local processors grapple with depressed prices.

Chairman Rai Tajveer says cases of dumping the sweetener in the country have become rampant in recent days, a move that has seen the factory price for the commodity remain low due to competition with cheap sugar.

“An increase in cases of smuggled sugar is now worrying as it is affecting the local millers,” said Mr Tajveer.

Millers argue that for them to make profit, they need to sell a 50-kilogramme bag of sugar for at least Sh5,000, currently it is selling at between Sh3,800 and Sh4,000.

The concerns come just a few days after more than 450 bags of sugar from Dubai were confiscated in Isiolo while a fortnight ago a consignment of contraband sugar worth Sh56 million was seized at the Mombasa port.

This brings to total about 10 cases that have been prosecuted in Isiolo within the last six months as the cases of smuggling along the border line continues to rise.

Agriculture Fisheries and Food Authority director-general Alfred Busolo says stiffer penalties have to be employed in order to curb the illegal trade.

Mr Busolo pointed out that the current penalty is lenient and would does not deter smuggling incidents.

“At the moment, the law requires that the suspects forfeit the consignment of contraband goods to the state for destruction, this is not enough to check cases of smuggling,” he said.

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Mr Busolo said it was important for the country to invest in advanced technology along the porous border in order to control smuggling cases.

The consignment that was impounded in Mombasa had 17,600 bags of sugar, each weighing 50 kilogrammes each, with a value of Sh56 million.

They had been declared as hardware material, whole lentils, photocopiers, office furniture, new shoes and dried grapes.

The government has taken steps to stop trafficking of sugar from the southern Somalia port of Kismayu to Kenya’s frontier and has set up a special unit in the National Security Intelligence Service to dismantle smuggling cartels.

Sugar smuggling is lucrative in Kenya, where the local industry is protected from imports as part of an agreement with African trading partners. The commodity is sold at an inflated price compared to global markets.

In May, President Uhuru Kenyatta directed the Treasury and the Kenya Revenue Authority to seal loopholes through which illegal sugar enters the country and name those behind the trade.

The industry regulator estimates the cost of producing a tonne of sugar at about Sh47,000 in western Kenya compared with Sh27,000 in rival producers such as Egypt.