Commodities

State opens window for sugar barons to import 100,200 metric tonnes

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The Cabinet Secretary for Agriculture and Livestock Development Mithika Linturi (Right) and Principal Secretary Livestock Development Jonathan Mueke before the Public Investments Committee on Social Services, Administration and Agriculture at Parliament Buildings Nairobi on August 1, 2023. PHOTO | DENNIS ONSONGO | NMG

The State has locked out public and private sugar millers from importing sugar in what is likely to hand well-connected sugar barons a new window to mint billions.

The Ministry of Agriculture says private businessmen will be allowed to bring in 100,200 metric tonnes of sugar during the four-month importation window.

Read: How India sugar export restrictions have hit Kenya

President William Ruto said last week that Kenya would import 100,200 tonnes of sugar outside the Common Markets of East and Central Africa (Comesa) region following a shortage of the sweetener.

The country produces about 600,000 tonnes of sugar per year against an annual consumption of 800,000 tonnes.

Sugar prices have hit a high of Sh490 per 2-kilogramme for the brand of Ndhiwa Sugar Company whose kilogramme currently retails at Sh250.

Nzoia Sugar Company, for instance, is currently milling less than 2,000 tonnes of cane per day (TCD) against the installed capacity of 3,000.

“We have only allowed businessmen to import the sugar and not public or private sugar millers. Public and private sugar millers will not be allowed to participate in the importation,” Mithika Linturi, the Agriculture Cabinet Secretary, told National Assembly Committee on Delegated Legislation last week.

“We want public and private sugar mills to abide by the terms and conditions of their licence which require them to develop nucleus farms, mill and market local sugar.”

Mr Linturi told the committee chaired by Ainabkoi MP Samuel Chepkonga that a memorandum developed by the ministry detailing how the sugar sector will be revived will be tabled before the Cabinet this week.

He said Kenya has been unable to source sugar from Comesa either due to shortage or refusal by some member states with surplus to sell.

“We are unable to get sugar from Comesa. Some countries with surplus have refused to sell to us,” Mr Linturi said when he appeared before MPs.

Out of Kenya’s five State-owned sugar mills, only Southern Nyanza Sugar Company (Sony Sugar) is currently operating.

The rest — Muhoroni Sugar, Mumias Sugar, Chemilil Sugar and Nzoia Sugar — have closed for factory upgrades or to allow for the cane to mature.

Sony Sugar is currently competing with privately owned Sukari and Transmara sugar companies.

The Agriculture Food Authority (AFA) issued a directive to the sugar millers to allow for the cane to regenerate before they can harvest in September.

“We have banned public and private sugar millers from imports. We want to revive this sector and therefore we can’t allow them to import since their licences allow them to develop nucleus farms, mill and market the sugar,” Mr Linturi said.

“Private businessmen have been allowed to import. We are going in the meantime to revive the five State-owned millers. We have developed a Cabinet memo after a lengthy consultation with the stakeholders.”

Read: Sugar woes to persist as cane shortage hits millers

Sugar millers

Mr Linturi said the outcome of the Cabinet deliberations will inform the future of the five State-backed sugar millers.

Kenya has long been toying with the idea of privatising the sugar companies to turn around their fortunes.

The National Assembly’s Departmental Committee on Agriculture and Livestock wants the law regulating the importation of sugar changed to protect local farmers.

It says that the high cost of agricultural farm inputs affects farmers leading to most of them shifting to other crops.

The committee also wants the Sugar Act to be operationalised to protect both millers and the farmer.

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