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Commodities

End of cheap sugar era as import caps loom

A man shops for sugar. FILE PHOTO | NMG
A man shops for sugar. FILE PHOTO | NMG 

Consumers are staring at higher sugar prices as the window for non-Comesa duty-free imports closes, subjecting Kenyans to expensive imports.

The window ends this month and importers will be restricted to source the sweetener from the Common Market for Eastern and Southern Africa (Comesa) states, effectively locking out cheap sugar from Brazil where the bulk of imports have been coming from.

The agriculture sector regulator says sugar from Comesa lands in the country at Sh5,000 for a 50 kilogramme bag while the same quantity from Brazil costs Sh3,800.

“We expect an increase in price given that sugar from the Comesa region is more expensive compared with the one from other countries such as Brazil,” said Agriculture and Food Authority (AFA) director general Alfred Busolo.

“Traders have about 60,000 tonnes of sugar in warehouses while local millers have some stocks; this will maintain the current prices for a while,” Mr Busolo said. Consumer prices have been declining since June, after hitting a record high of Sh400 for a two-kilogramme packet, due to shortage of the commodity.

The move forced the government allow imports from outside the Comesa zone to bridge the deficit and protect consumers from exorbitant prices.

A two kilogramme packet of the sweetener is currently retailing at an average Sh260 following an increase in supply. Kenya has an annual quota of 300,000 tonnes for sugar from Comesa to make up for the local deficit. The country requires 900,000 tonnes of sugar every year to meet domestic needs, against local production of 600,000 tonnes.

Sugar production in the first six months of the year dropped 40 per cent compared with the same period in 2016 as cane shortage took a heavy toll on production. Data from the Sugar Directory shows that production between January and June stood at 202,023 tonnes down from 337,826 realised in the same period last year.

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