Commodities

Traders defy duty-free sugar import quota, raising prices

sugar

Sugar at a Nyeri supermarket on June 9, 2021. PHOTO | JOSEPH KANYI | NMG

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Summary

  • According to the Sugar Directorate, traders imported 263,988 in the review period, exceeding 210,530, which is the limit that the Treasury set for sugar coming in from Common Markets for Eastern and Southern Africa (Comesa).
  • The breach of quota could be the force behind the current expensive sugar in the market as the Kenya Revenue Authority (KRA) was to charge 100 percent duty on imports above the limit, as directed by the Treasury.
  • The month of November saw a huge jump in imports, which stood at 61,458 when compared with the previous months.

Traders breached the limit the Treasury set on duty-free sugar imports and shipped in 25.4 percent above the quota by the end of last November, subjecting the consumers to costly sweetener.

According to the Sugar Directorate, traders imported 263,988 in the review period, exceeding 210,530, which is the limit that the Treasury set for sugar coming in from Common Markets for Eastern and Southern Africa (Comesa).

The breach of quota could be the force behind the current expensive sugar in the market as the Kenya Revenue Authority (KRA) was to charge 100 percent duty on imports above the limit, as directed by the Treasury.

For instance, the directorate noted that the average price of sugar in November jumped to Sh6,125 for a 50-kg bag up from Sh4,770 in October.

“Total sugar for the month amounted to 61,458 tonnes. The white refined sugar was 22,390 tonnes while mill white/brown was 39,068 tonnes,” said the directorate.

Normally, sugar from the Comesa region does not attract duty. Treasury Cabinet secretary Ukur Yatani in a gazette notice last year, however, said volumes that would surpass the limit would attract 100 percent tax.

The Treasury had in March slashed the amount of sugar imported duty-free to Kenya from the Comesa countries by 30 percent as the government moved to tame the influx of the cheap sweetener following an outcry from farmers.

Kenya had previously been allowed to ship in 300,000 tonnes of sugar annually from the Comesa member states to avoid dumping of the cheap commodity in the country.

The month of November saw a huge jump in imports, which stood at 61,458 when compared with the previous months.

Kenya has been grappling with a shortage of sugar supply in recent days occasioned by disruption in production as a result of breakdown by some of the millers in western Kenya.

The move saw the wholesale price of sugar jump 23 percent for a 50-kilogramme bag in November to mark one of the largest movements in recent months.

The commodity has been selling at Sh6,200 from Sh5,050 previously in a move that saw consumer price of sugar shoot from Sh230 in September to Sh270 for a two-kilo packet at the moment.

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