Commodities

Higher production fails to tame high sugar prices

sugar

Sugar at a Nyeri supermarket. PHOTO | JOSEPH KANYI | NMG

The retail price of sugar remains high despite an increase in local production of the commodity and continued imports to cover the domestic deficit.

Sugar prices on the shelves are retailing at between Sh250 and Sh260 for a two kilogramme packet depending on the brand, which is higher than the Sh230 that the same quantity fetched in December.

Sugar production meanwhile jumped 11.7 percent to 64,839 tonnes in January compared to 58,044 tonnes in the same month last year. Imports in January stood at 18,000 tonnes, helping to supplement the increased local production.

“In January 2022, total sugar production was 64,839 tonnes compared to 58,044 tonnes produced in January 2021, giving an increase of 11.7 percent attributed to improved availability of cane in all sugar zones,” the Sugar Directorate said in its January report.

The report shows that the ex-factory price of a 50-kilo bag was Sh5,234 in the review period from Sh5,212 a month earlier while a kilo retailed at Sh130.

The price of the commodity started rising in November last year when operations in a number of factories in western Kenya were disrupted.

The plants of Chemelil Sugar Company Limited and Kibos Sugar & Allied Industries broke down in August last year, leading to a huge backlog of cane to be processed and which impacted on total stocks available in the country.

Closure of the factories left farmers stranded with over 14,000 tonnes of the crop drying on the farms and trucks as long queues of tractors were witnessed at different weighbridges disrupting the production of the commodity hence creating a shortage in the market.

The rising prices come at a time when the country has limited cheap imports from Common Market for Eastern and Southern Africa (Comesa) to protect growers from the competition.

The National Treasury last year limited imports to 210,163 tonnes in the new quota rules to traders of the commodity from the usual 350,000 tonnes that the country is normally allocated under the Comesa window.

Kenya is a sugar deficit country and relies mainly on imports to meet the local demand that has been growing over the years.

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