Markets & Finance
Kenya population growth pushes sugar demand to 889,000 tonnesMonday May 23 2016
Kenya’s sugar consumption has increased by three per cent in the last one year following population growth.
Statistics from sugar directorate indicate that consumption stood at 889,233 tonnes from 860,084 tonnes in 2014.
The statistics paint a picture of fast rising demand, far surpassing the initial estimates of 800,000 tonnes a year. The directorate commissioned a survey to ascertain the current requirement in Kenya.
“The recent study indicates that sugar consumption has gone up in recent years and has so far passed our initial estimates. We attribute the increased consumption to the growth in population (2.7 per cent last year),” said Andrew Osodo, head of the sugar directorate.
Mr Osodo said that the 800,000 tonne assumption which the country has been using for planning was last updated in 2010.
Kenya is a sugar deficit country and relies on imports from the Common Market for Eastern and Southern Africa (Comesa) to bridge the deficit.
The country has been allocated an annual quota of 300,000 tonnes of duty free sugar from Comesa to bridge the gap as production in the last three years has averaged 500,000 tonnes.
However, Kenya’s sugar industry registered record production last year with factory output rising by six per cent compared to 2014.
Data from the Kenya Bureau of Statistics (KNBS) shows that production hit 632,000 tonnes last year from 592,000 tonnes in the previous year, making it the highest production in Kenya’s sugar history.
Mr Osodo said the increased production was as a result of investments carried out in the sugar sector in the past five years that have seen introduction of early maturing sugarcane varieties.
READ: Kenya cuts sugar imports as production improves
Even as the local production capacity jumped, sugar imports grew by 29 per cent as high demand for industrial sugar pushed up the volumes of the sweetener.
According to statistics from the Agriculture Fisheries and Food Authority (Affa), industrial sugar imports grew by 14 per cent to 147,000 tonnes in 2015 from 129,000 in the previous year.
Kenya was last year granted a new one-year extension of sugar import limits from the regional trade bloc Comesa, offering relief to local millers that would have had to deal with tougher competition from more efficient producers.
The safeguards allow Kenya to limit the entry of sugar imports to 350,000 tonnes to plug the annual production deficit.
The decision to grant Kenya a sixth extension to February 2017 was reached during the 35th Common Market for Eastern and Southern Africa (Comesa) Council of Ministers meeting in Zambia.
The tariffs were scheduled to fall to zero last February and the extension gives more time for Kenya to improve infrastructure and carry out other reforms like sale of the loss-making companies, introduce new cane varieties and revamp roads in sugar-growing zones, which the country is currently addressing.