Millers pay dearly for cane as severe shortage bites

A tractor ferrying sugarcane from sugarcane plantations. 

Photo credit: File photo | Nation Media Group

Kenya is facing a shortage of sugarcane, forcing manufacturers to push up the cost of raw cane by 16 percent above the government-set price even as the Sugar Directorate raises concerns over harvesting of the immature crop.

The Sugar Directorate says the total volume of sugar milled last month dropped 40 percent to 546,000 tonnes when compared with 908,000 in January this year.

Competition by millers for the limited supply has pushed the price of a tonne of the commodity from Sh4,584, which is the recommended price by the sugar directorate, to Sh5,250.

“The sugar industry is experiencing an acute cane shortage across all the zones, which has resulted in factories scaling down their operations and diminished production. There has been an upward sugarcane price pressure with the private millers increasing prices to attract limited cane,” said the directorate.

The directorate says the shortage has seen some millers buy cane that has not attained the harvesting age, a move likely to affect production and cut on farmers' returns.

“With the exception of Transmara region, harvesting of immature cane has been observed across the sugar industry, portending a gloomy future for cane supply and sugar production this year,” the regulator said.

Dwindling cane supply, which has cut down on production, saw the total sugar bagged in the review period decline by 26 percent to 49,761 tonnes.

The fall implies that consumers are staring at an increase in the cost of the sweetener on the back of limited availability in the market.

The price of the commodity in supermarkets has started rising steadily towards the Sh300 mark for a two-kilogramme packet from Sh280 in February.

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