Commodities

Consumers face fresh sugar price increase

sugar-1211

A tractor delivers cane to Butali Sugar Factory in Kakamega County. FILE PHOTO | NMG

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Summary

  • Sugar prices are set for fresh increase in the coming days after the government raised the price of cane.
  • Agriculture Cabinet Secretary Peter Munya increased producers’ price of sugarcane from Sh3,833 per tonne to Sh4,112, effective November 18.

Sugar prices are set for fresh increase in the coming days after the government raised the price of cane.

Agriculture Cabinet Secretary Peter Munya increased producers’ price of sugarcane from Sh3,833 per tonne to Sh4,112, effective November 18 with millers expected to pass this cost to consumers.

Already, some of the sugar brands in supermarkets, such as the Neutral Meal are now selling at Sh295 for a two-kilo packet, having jumped 18 percent in a span of one week.

This is the second time that the government has reviewed the price of sugarcane, coming as a boost to farmers.

The Crops (Sugar) (General) Regulations, 2020 provide for a Sugarcane Pricing Committee responsible for developing the pricing formula and reviewing prices, which is based on the cost of the commodity on the shelves.

The rising cost of sugar and other commodities will have a negative impact on inflation as food basket is a major driver of the cost of living. Just last week, bakers increased the cost of bread by Sh5 for a 400 gramme loaf citing high cost of wheat.

Food takes up the largest share (36 percent) of the basket of goods that is used in calculating inflation, making it the main driver of the cost of living. Inflation in October dropped to 6.4 percent from 6.91 a month earlier in what Kenya National Bureau of Statistics attributed to low food prices.

Bread is a common staple on breakfast tables across the country, meaning that any price increase is keenly felt especially at a time when the cost of milk has also gone up.

A 500ml packet of milk has gone up from Sh50 previously to Sh55 with processors pinning the increase on a supply shortage of the commodity in the market.

Supply deficit

An increase in consumer cost of milk has been attributed to the high farm gate price that processors are paying farmers per litre of the commodity, which now stands at Sh45.

In August and September, several factories grappled with production hitches due to the breakdown of machines and shutdowns for routine maintenance.

The shortage created a deficit in supply in the market increasing the cost of the commodity in the month of August to Sh4,800.