Kenya is considering exporting excess sugar produced by local millers, citing a stock glut in the market.
The excess production—which is tipped to continue as new cane fields are harvested—also saw Kenya shut its duty-free sugar importation window on June 30, 2024.
The Agriculture and Food Authority (AFA), which is the regulator of the agricultural sector, said it is seeking approval from Parliament to open the window for the export of the commodity.
Bruno Linyiru — Agriculture Food Authority (AFA) — on exporting surplus Kenyan sugar
AFA chairman Cornelly Serem said the move would enable farmers to continue access to the market, coming at a time when millers are overwhelmed by cane deliveries.
“We are in the process of submitting a formal request to Parliament to open exports of sugar. We are traditionally net importers of sugar but we are now in a unique position where we have a surplus,” he said on Wednesday.
Official data shows that local millers produced 384,552 tonnes of sugar in the six months to June 2024. This is a 123.4 percent increase compared to the 172,105 tonnes they bagged in the preceding six months.
It is also an increase of 29.7 percent compared to the 296,382 tonnes they produced in the six months to June 2023.
The sugar export plan by AFA is a rare move considering that Kenya has a long time relied on imports to plug a growing deficit in sugar production.
Kenya produces an estimated 800,000 tonnes of sugar annually but demand stands at about 1 million tonnes each year leaving a deficit of 200,000 tonnes.
The shortfall is usually plugged by duty-free importation of the commodity owing to multi-year safeguards from the Common Market for Eastern and Southern Africa (Comesa).
Most countries within the Comesa region are net importers of sugar, but Malawi, Mauritius, Eswatini, Zambia, and Zimbabwe are net exporters of the commodity.
This indicates that Kenya could potentially find a market for its sugar within the Comesa block, but it would have to compete with cheap imports from global sugar giants such as Brazil and India.
According to Mr Serem, AFA will also push for the government to purchase sugar in large quantities to keep strategic stocks that can be released when output dries up.
This comes a year after the government reintroduced the National Strategic Reserve (NSR) with an eye on stocking up food reserves from both local harvests and duty-free imports to ease food shortages.
“We are also looking at whether the national government can buy sugar that is being produced by millers and then keep it as a strategic stock that can be released when needed,” said the AFA chairman.
According to regulations published by the Ministry of Agriculture and Livestock Development last year, NSR stocks will be determined by prevailing market demand and supply conditions.
Sugar production has jumped over the eight months following the full resumption of crushing by millers in December last year following a four-month suspension which was aimed at allowing cane to mature.
This allowed thousands of acres of cane to mature, and boosted by the ample rains received in the country from October last year, led a huge harvests of sugarcane.
Further, acreage under cane has increased by 5,000 acres over the last two years, boosting domestic output.
According to data from AFA, domestic production of sugar hit a high of 75,685 tonnes in June, which is more than double the 34,072 tonnes that were produced in the same month last year.
The ample availability of cane has however led to a decline in cane prices with millers reporting large quantities of cane deliveries.
The Sugar Pricing Committee earlier this month cut cane prices to Sh4,950 per tonne in August down from Sh5,100 last month.
Consumers are however enjoying a drop in sugar prices, which had risen sharply last year.
Data from the Kenya National Bureau of Statistics (KNBS) shows that a kilogramme of sugar was retailing at an average of Sh164.41 last month.
This is a decrease of 22.3 percent compared to an average price of Sh211.57 during the same period last year.
