Alfred Busolo, director- general of the Agriculture, Fisheries and Food Authority. PHOTO | FILE
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Kenya has revised its orders downwards to 8,000 tonnes of sugar from the 10,000 tonnes imported every month to bridge deficit.
Kenya has cut sugar imports by a fifth in its bid protect local millers as domestic production improves.
The country has revised its orders downwards to 8,000 tonnes of sugar from the 10,000 tonnes imported every month to bridge the deficit, the agriculture sector regulator says.
Alfred Busolo, director- general of the Agriculture, Fisheries and Food Authority, says the country has scaled down the import volumes after factory stocks rose above the optimum levels.
“We have cut the imports by 20 per cent because of an increase in stocks at our local factories. The move is aimed at curbing the flooding of the market,” said Mr Busolo.
The stocks of sugar held in the local factories stood at 12,000 tonnes on Wednesday.
Mr Busolo said daily stocks should not be allowed to go beyond 12,000 tonnes as that would hurt the millers and cause delay in payments to farmers as a result of slow sales by the factories.
Mr Busolo attributed the improved stocks on good farming practices and government support to millers.
Data from the Kenya National Bureau of Statistics indicates that cane deliveries to factories increased from 585,000 tonnes in August 2015 to 593,000 tonnes in September.
The sugar directorate has issued 40 permits to importers who bring in the commodity mainly from the Common Market for Eastern and Southern Africa (Comesa) as well as from neighbouring countries such as Uganda.
The price of sugar has stabilised in the last four months, with a kilogramme of local non-branded sugar retailing at Sh100 while the branded one costs Sh125.
Kenya’s ailing sugar industry received a further safeguard extension of one year from Comesa to regulate the entry of cheap sucrose into the country.
The decision to grant the extension was reached during the 35th Comesa Council of Ministers meeting in Zambia late last year.
Kenya invoked the infantry clause – Article 61 of the Comesa Treaty that calls for the protection of the emerging factories, limiting competition from other States until that time when they will be considered to have matured and in a position to compete.
The Sugar Directorate estimates the cost of producing a tonne of sugar at about $570 (Sh57,000) in western Kenya. The cost ranges between $240 and $290 (Sh24,000 to Sh29,000) in Egypt.
Critics have blamed the high cost of production for the woes facing the sector as well as poorly funded government-owned factories that use aging machinery prone to break down.
The State is selling 51 per cent stake in Sony, Chemelil, Nzoia, Muhoroni and Miwani milling companies.
The country produces 600,000 tonnes of sugar a year compared with an annual consumption of 800,000 tonnes. The deficit is covered through strictly controlled imports from Comesa.
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