Kenya risks sugar crisis on shortage in global marketWednesday January 11 2023
Kenya might fail to secure stocks of sugar at the international market even with the opening of duty-free imports owing to high prevailing global prices and a shortage of the commodity world over, a move that will keep the cost high on the shelves.
Sugar Directorate head Willis Audi says the cost of sugar in the global market remains high and this may hinder imports.
The government opened an import window in December that would see traders ship in 100,000 tonnes of sugar outside of the Common Market for Eastern and Southern Africa (Comesa) region to curb an imminent shortage that has pushed up its cost.
READ: Kenya to fall short of Comesa sugar import quota
“We are not sure if there is that sugar in the market and if it is there, the prices might be higher and this may impact imports,” he said.
Last year, traders struggled to ship in the quota Kenya had been allocated by the Comesa, bringing in 115,000 tonnes against the required 180,000 tonnes by the end of last November.
Mr Audi said even though the December figures are yet to be out, traders could have only imported slightly over 10,000 tonnes.
The tightening supply in the market saw the price of the commodity shoot from Sh6,787 in October to Sh7,149 for a 50-kilo bag in November last year, according to the Directorate.
Imported sugar prices landed in Mombasa at Sh85,000 a tonne in November compared with Sh83,000 in October, highlighting the impact of the shortage of the commodity.
The Treasury waived the duty in December to allow traders to bring the commodity outside of the regional market as sugar coming in from other parts of the world attracts at least 50 percent duty under the East African Community’s common external tariff.
The sugar prices in the world market have been volatile in the last year with a tonne of the commodity hitting a high of $522 on Monday (January 9) compared to $509 around the same time in 2021, according to the International Sugar Organisation.
Kenya relies on imported sugar to meet its annual deficit which has now grown to one million against the production of 800,000 tonnes annually.
READ: Kenya gets another sugar imports cover
The Comesa countries where Kenya is allowed to import the commodity from, are selling their produce to other global regions especially the European Union owing to the good prices that it fetches there.
According to the Sugar Directorate, in the EU prices are higher by at least $20 per tonne compared to within the region.