Higher sugar imports to deplete duty-free quota

Kenya has almost exhausted its sugar import quota from the Common Market for Eastern and Southern Africa (Comesa) after ramping up imports to cover for a local production shortfall amid high consumer prices for the commodity.

The Sugar Directorate said Kenya had by October imported 201,530 tonnes of sugar against the required 210,163 tonnes, equivalent to 96 percent of the allocated quota.

The Treasury had in March slashed the amount of sugar that can be imported duty-free to Kenya from the Comesa countries by a third as the government moved to tame the influx of the cheap sweetener following an outcry from farmers.

The Treasury said imports that exceeded the set limit would attract 100 percent duty, effectively protecting farmers and local sugar processors from rogue importers.

Kenya has been grappling with the shortage of sugar supply in recent days, occasioned by disruption in production as a result of breakdown by some of the millers in western Kenya.

The move saw the wholesale price of sugar jump 23 percent for a 50-kilogramme bag in November, one of the largest increments in recent months.

The commodity has been selling at Sh6,200 up from Sh5,050 previously, which saw consumer price of sugar shoot from Sh230 to Sh270 for a two-kilogramme packet.

Kenya had previously been allowed to ship in 300,000 tonnes of sugar annually from the Comesa member states to avoid dumping the commodity into the country.

Kenya likely exhausted the new reduced quota by November, given that the latest current import data from the Sugar Directorate did not include the two last months of the year.

From January to October, traders have been importing at least 35,000 tonnes on average to meet the local demand.

Two weeks ago, however, sugar cane farmers through the Kenya Sugarcane Growers Association called for a new audit on the country’s sugar deficit, saying outdated data on the shortfall risks facilitating higher import volumes at the expense of local producers.