Commodities

Treasury reduces duty-free sugar import quota by 30pc

Sugar-port

Workers load sacks of sugar on a truck at Mombasa port. FILE PHOTO | NMG

geraldandae

Summary

  • Treasury Cabinet Secretary Ukur Yatani said in a Kenya Gazette notice that imports which exceed the set limit will attract 100 per cent duty, in what comes as good news to farmers and local sugar processors.
  • Kenya is normally allowed to ship in 300,000 tonnes of sugar annually from the Comesa member states to avoid dumping of cheap commodity into the country.
  • Mr Yatani said firms enjoying the duty free status will have to meet the rules of origin of Comesa.

The Treasury has capped the amount of sugar that can be imported duty-free to Kenya from the Common Market for Eastern and Southern Africa (Comesa) at 210,163 tonnes as the government moves to tame influx of the cheap sweetener following an outcry from farmers.

Treasury Cabinet Secretary Ukur Yatani said in a Kenya Gazette notice that imports which exceed the set limit will attract 100 per cent duty, in what comes as good news to farmers and local sugar processors.

Kenya is normally allowed to ship in 300,000 tonnes of sugar annually from the Comesa member states to avoid dumping of cheap commodity into the country.

Mr Yatani said firms enjoying the duty free status will have to meet the rules of origin of Comesa.

The announcement comes just a month after Ministry of Agriculture said it was assessing the available stocks of sugar as it monitors imports to curb excess supply in the market.

Kenya has been at loggerheads with Uganda over sugar imports with local traders arguing that the commodity coming from the landlocked neighbour originates from third party countries, compelling the Treasury to insist on rules of origin.

The wholesale price of sugar has dropped from Sh5,000 last year to Sh4,800 for a 50 kilo bag. This has seen the consumer cost also decline to an average of Sh225 for two kilo packet from Sh235 in 2020.

Kenya entered into a deal with Uganda to allow Kampala export surplus sugar into the country about three years ago but Nairobi delayed the decision until late last year when the neighbouring state was allowed to ship in 20,000 tonnes of the 90,000 tonnes surplus that it had requested.