Retailers keep sugar price high even as factory cost edges down

AFA director-general Alfred Busolo. PHOTO | FILE
AFA director-general Alfred Busolo. PHOTO | FILE 

The price of sugar at the factory level has dropped by nearly four per cent even as the shelf price of the sweetener remains high, a situation the regulator blamed on profiteering by retailers.

The 50 kilogramme bag is now trading at Sh5,400 from Sh5,600 last month, but the decline has not reflected in the supermarket prices, at Sh135 for local sugar.

“The factory prices have dropped to an average of Sh5,400 at the moment, though this has not reflected in shelf price as a result of business people who want to make high margins,” said Mr Alfred Busolo, Agriculture Food Authority director-general.

The regulator, however, said consumer prices have been shielded from further rise due to increased imports to cater for the shortfall in domestic production, which has resulted from a sugarcane shortage.

The imports, said the regulator, have been maintained at over 20,000 tonnes a month, up from 15,000 tonnes that should be imported when the sugar situation in the country normalises.

In November, the imports stood at 25,000 tonnes while last month 23,000 tonnes were shipped in to supplement shrinking local stocks.

Stocks held by millers in factories dropped to a low of 6,500 tonnes as of Tuesday from 8,000 tonnes late last month as some processors struggle with production issues due to low-cane supply.

The official noted that in an effort to tame the high prices they have urged millers to allow consumers to buy directly from the factories. Already, Nzoia and Sony have opened depots in Bungoma and Kisumu.