Transport

Stockists push for more sugar imports to ease retail prices

Sugar-port

Stockists, hoping the imports received directly from borders and ports would be cheaper, say the current supply chain where local millers have to sell to speculators, was driving up shelf prices. PHOTO | FILE

Sugar cartels are exploiting an ambiguous supply chain to make up to Sh1,400 on every bag of the commodity, stockists have claimed as they push for unfettered imports.

The stockists, hoping the imports received directly from borders and ports would be cheaper, say the current supply chain where local millers have to sell to speculators, was driving up shelf prices.

Ex-factory price for a 50-kilogramme bag of sugar currently ranges between Sh3,800 and Sh5,200.

“We buy one 50-kg bag from the brokers at between Sh4,600 and Sh5,200. It would be cheaper if we were allowed to source it from millers and consumers would benefit from lower retail prices,” said Leila Sheikh, a supplier of white sugar.

The World Bank ranks Kenya among the markets where consumers pay highest prices for sugar. Last month, President Uhuru Kenyatta said Kenya would import sugar from Uganda to plug a deficit.

The commodity stockists said such a deal would significantly pull down retail prices of the sweetener. Sugar from Uganda sells at Sh100 a kilogramme in Kenyan supermarkets, while the local one goes for up to Sh120.

Ms Sheikh, who supplies the commodity to tourist hotels, said their customers have been complaining that the prices were exploitative.

Higher

“The problem is that we cannot buy sugar from millers because there are middle men who buy it at factory prices and sell it to us at higher prices, making a kill. We have never understood why milling companies cannot sell it to us without going through brokers,” she said.

Ahmed Mohamed, also a supplier, said it was not true that importing sugar from Uganda would flood the market.

“There are cartels and brokers who buy up to 200,000 bags from millers, keep the sugar in go-downs and sell it at exorbitant prices,” he said.

Senate committee on Agriculture, Livestock, Fisheries and Co-operatives chairman Kiraitu Murungi said there was nothing wrong in importing sugar from Uganda, adding that the country also imports the commodity from other Comesa countries.

“In Brazil, factories consider sugar a byproduct since they produce other products such as electricity and biogas from sugarcane and can even afford to give it for free. Our factories were set up in the 1970s and 80s and the machines are obsolete. We need to seriously think about upgrading them rather than engage in politics,” Mr Murungi said.

Kenya consumes about 800,000 tonnes of sugar annually with a production deficit of 220,000 tonnes being plugged through imports.