Local sugar production slumps to four-year low on cane shortage

Trucks deliver sugarcane. PHOTO | FILE

Sugar production by Kenyan millers fell by 40 percent in 2023 - a four-year low- due to sugarcane shortages putting pressure on prices of the sweetener.

Data from the Kenya National Bureau of Statistics (KNBS) shows that domestic output dropped to 472,773 tonnes in the 12 months to December 2023, down from the 796,600 tonnes produced a year earlier.

This could further increase the price of sugar, which has already surged 32 percent over the last year, jumping from Sh159 per kilogramme in January last year to Sh209 at the end of January this year, according to KNBS’ latest inflation figures.

Sugar is one of the commodities whose prices have increased by over 30 percent in the last year even as headline inflation slowed. Others are carrots, onions, kerosene, and electricity, whose prices were influenced by a mix of local and international factors, including drought.

The drop in sugar production follows a five-month-long ban on sugar milling by the Agriculture and Food Authority (AFA) that ran from July to November last year after millers ran out of mature sugarcane for processing.

According to the AFA, some millers were processing immature crops and only those factories that proved they had collected enough raw materials were allowed to operate during the ban period.

In September, two months after the ban, sugar production fell to the lowest monthly level in over five years, with millers only producing 16,720 tonnes, almost five times less than the registered production at the start of the year.

While production nearly doubled to 48,877 tonnes in December, it is projected to remain subdued for the better part of 2024, indicating consumers may continue to rely on imported sugar.

A report by the United States Department of Agriculture’s Foreign Agriculture Service (FAS) published last year forecasts sugar production in Kenya to remain below 650,000 tonnes this year, which is generally lower than production since 2020.

“Kenya’s sugar production is expected to decline in the financial year 2023/24 to 650,000 metric tons due to lower harvest as Kenya farmers prematurely harvested sugarcane in the financial year 2022/23 to meet Kenya’s increasing milling demand,” said FAS in the annual report that focuses on Kenya’s sugar industry.

PAYE Tax Calculator

Note: The results are not exact but very close to the actual.