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Traders snub sugar import licences as price falls

SUGAR

Offloading bags of imported sugar at the port of Mombasa. FILE PHOTO | NMG

Traders have stopped seeking new sugar import licences as cheap commodity from Brazil and depressed local prices make it unviable to procure outside the country.

There is currently 900,000 tonnes of sugar in the country, which has helped push down the cost of the sweetener at the factories, making it cheaper than the commodity coming in from other regions.

Ordinarily, sugar from other regional countries is normally cheaper compared with what is produced locally because of high level of efficiency. Locally, it takes $800 to produce a tonne against $400 in Mauritius.

“Importers are hardly importing right now. We have a lot of Brazilian sugar in stock. Comesa sugar right now cannot compete given the depressed local price,” said head of the Sugar Directorate Solomon Odera.

READ: Local sugar stocks down as prices cut

A 50-kilogramme bag of sugar at the factory is selling at Sh3,800 against Sh4,000 it would cost a trader importing from any Comesa country.

The low cost of sugar has seen the level of domestic stocks drop from a high of 11,000 tonnes a fortnight ago to about 8,000 tonnes as traders opt to buy more of the local commodity.

The government in May removed duty on imported sugar outside the Comesa region after a kilogramme of the commodity hit a record high of Sh200.