The wholesale cost of sugar for a 50-kilogramme bag has increased by 31.5 percent to Sh9,600 from Sh7,300 last month, signalling an increase in shelf prices for consumers who will continue to pay more for the commodity in the next few weeks.
A spot check by the Business Daily across supermarkets in Nairobi showed that a two-kilogramme packet of Ndhiwa and Mumias sugar brands is now retailing at Sh350 up from Sh290 last month.
Mara Sugar on the other hand is retailing at Sh360 up from Sh280 last month.
Wholesalers say the increase in prices is attributed to a shortage in the market as sugar importers shy away from shipping in the sweetener in the last few weeks.
“They are afraid duty-free sugar being imported by the government will flood the market with cheap sugar and if they are holding expensive stocks it will be detrimental for them,” said Benedict Gikunda, chief executive at sugar distributor Alesha Brands Limited.
The wholesale price of the commodity had jumped from Sh6,800 in March to Sh7,100 in April for a 50-kg bag, representing an increase of 4.4 percent due to a shortage in the market after a disruption in factory production in western Kenya.
Production has been inhibited by diminishing cane supply on the farms.
The shortage of cane has seen millers grapple with the little available, pushing the price of a tonne of the commodity paid to farmers from Sh4,584 to Sh5,250.
The diminishing supply of cane to factories, which has cut down on production activities, saw the total sugar bagged between January and March decline by 26 percent to 49,761 tonnes.
The scarcity of sugar in the market saw the government open the window for imports in December 2022, in a plan that was meant to 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 in the country.
The government had also allowed Kenya National Trading Corporation (KNTC) to import 200,000 tonnes of sugar duty-free.
This implies that Kenya, would by the end of the year have imported at least 300,000 tonnes of sugar out of the Comesa regional bloc.
The country is allowed to bring in 350,000 tonnes from member states, but the country restricted the imports to 180,000 tonnes last year.
The first two vessels with more than 42,000 tonnes of sugar docked in February in a bid to ease the pain of the decline in production by local millers.
