Sugar production declines by 40 per cent in first half

Sugar production in the first six months of the year dropped 40 per cent compared with a similar period in 2016 as the shortage of raw material in the field continues to take a toll.

Data from the Sugar Directorate indicates between January and June production stood at 202,023 down from 337,826 realised in the same period last year.

Sales fell 39 per cent in the period under review.

“All the sugar mills, except Kwale Sugar Company, reported decreased sugar production in the first six months. Low sugar production is attributed to the prevailing cane shortage in most zones,” says the report.

Total sugar sales in January to June stood at 201,431 tonnes compared with 331,065 tonnes sold in the same period in 2016.

Sugar stock held by all the sugar factories at the end of June 2017 was 3,939 tonnes against 4,718 tonnes in June 2016.

“Low sugar stocks being witnessed this year is a result of declining production against the rising domestic demand,” adds the report.

Limited supply in the period under review led to increased consumer prices with a kilogramme of the commodity trading 35 per cent higher compared with similar period last year.

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The directorate says a kilogramme of the sweetener retailed at Sh146, from an average price of Sh108 in corresponding period last year.

The unit has issued permits to nearly all the private millers to import 150,000 tonnes of the commodity before end of duty-free window next year for sugar coming outside the Common Market for Eastern and Southern Africa (Comesa).

Agriculture and Food Authority (AFA) said millers will be operating below their installed capacity in the next 12 months and need to cover for the shortage.

The Treasury scrapped duty on imported sugar outside Comesa region in May to allow traders to bring in unlimited quantities of the commodity.