Flood of sugar imports will kill sector

A man shops for sugar. FILE PHOTO | NMG
A man shops for sugar. FILE PHOTO | NMG  

I know of a large commodity dealer that has just discharged thousands of tonnes of brown bulk raw sugar from Brazil onto the floor of its warehouse in Mombasa from where it is bagging and selling the product to traders.

As we approach the end of the month, when the window for duty-free imports is expected to close, we are witnessing a flooding of the market with cheap sugar from Brazil like never before in the country’s history.

Clearly, greedy merchants have taken full advantage of the duty-free window, which the government granted to them in May to import huge volumes of sugar, and at an unprecedented scale.

It is noteworthy that some of the largest importers of bulk brown sugar from Brazil are local millers. As usual, it is the poor sugar cane famer who will bear the brunt.

With local millers now in a situation where it is more profitable to trade imported bulk sugar from Brazil, the incentive to mill sugar from local cane no longer exists.

But perhaps the most controversial issue in the whole saga is physical handling of the raw bulk sugar imports from Brazil and whether the manner in which they are being handled in Mombasa warehouses render them to be considered as fit for human consumption.

What you will witness in Mombasa right now is a situation where the stuff is transported in open trucks and offloaded directly onto warehouse floors.

Yet from what I read and from practice the world over, ‘food grade’ sugar is handled differently. First, it is packaged as part of the production process without being exposed to contaminants. It does not touch the floor of the warehouse.

Secondly, it passes through a process to remove extraneous matter. In the case of raw bulk raw sugar which must be subjected to further processing, the practice is to transport it on open trucks and conveyors and pour it directly onto floors of export warehouses.

I am not saying that the stuff we have imported from Brazil is not fit for human consumption. But it seems to me that it is the manner in which sugar is handled or delivered to the market that determines whether it is fit for human consumption.

Furthermore, experts tell me Brazilian sugar that is shipped in bags and declared by the seller as manufactured for direct consumption must have appropriate health certificates.

If anything, there is a vast global trade in bagged brown sugar for direct human consumption.

Why we are buying such huge quantities or raw bulk sugar remains a mystery. I think the Kenya Bureau of Standards should keep a close eye on the warehouses in Mombasa to study how the imports of raw bulk sugar from Brazil are being handled and transported - and to determine whether or not public health concerns being raised are legitimate.

Still, the biggest issue is what these huge imports are doing to the cane farmer. Mark you, there is a sense in which the decision by the government to open the duty-free window for sugar imports outside the Comesa region cannot be faulted.

Domestic prices of sugar had gone haywire. Where the government failed is in managing the import programme. We should not have allowed indiscriminate flooding of the local market with cheap and poor quality sugar from Brazil.

Will the duty-free window be closed? From what I gather, the government is preparing to open a new window from September 1, 2017 to December 31 that will only be open to millers.

Granted, we are still experiencing crippling shortages of the commodity. But we must not allow well-connected millers to control the agenda.
If we are to open a new window, let it be restricted to imports from Comesa.

A duty-free window that allows indiscriminate imports from countries like Brazil, India and Thailand will kill the farmer.