Commodities

Kenya seeks another extension of sugar safeguards from Comesa

sugarcane

Tractors ferrying sugarcane from sugarcane plantations along Kisii – Migori Highway. PHOTO | BENSON MOMANYI | NMG

Kenya is seeking a new extension for sugar safeguards from the Common Market for Eastern and Southern Africa (Comesa), before expiry in February.

The extension, if allowed, will see Kenya get a record sixth relief of the safeguards against an allowable limit of five years under the Comesa trade rule.

Kenya is seeking one more year to address the pending issues in the sector as it wants to make the industry competitive ahead of liberalisation that will see imports flow without limits.

“We have already started negotiations for the extension of the safeguards to allow us complete some of the things that are still pending,” said head of Sugar Directorate Willice Audi.

Mr Audi said the pending areas include payment method that Comesa recommended should be changed from weight to quality of sucrose content.

Comesa had issued a raft of measures to Kenya on the road to liberalisation.

These measures include lowering the cost of production, sugar factories diversifying into other revenue streams such as production of ethanol and cogeneration, change of payment formula and increasing production capacity.

Mr Audi said the negotiations are being spearheaded by the Ministry of Trade and is to be presented to Comesa Council of Ministers for consideration.

In 2019, Kenya was given an extension of three years to put its house in order but the window is closing with the country having not achieved all the set conditions.

Kenya has always argued that allowing uncontrolled imports will hurt the sugar sector because of the costly production of the commodity locally.

The cost of producing one tonne of sugar in Kenya is about $900 (Sh108,729) compared with $400 (Sh48,324) in Mauritius.

Mr Audi said the Directorate is working towards addressing high cost of production to make the sector more competitive against the imports.

“We are addressing all these issues and by the end of one year, I am sure we would have achieved,” he said.

Kenya is allowed to import up to 350,000 tonnes of sugar from the Comesa region to bridge the local deficit.

There are plans to private Kenya's State-run sugar millers as one of the ways of saving the industry.

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