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Kenya breaches duty-free sugar imports cap by 102pc

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The Sugar Directorate exceeded the sugar import limits set by the National Treasury last year by 102 percent. FILE PHOTO | NMG

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Summary

  • The Sugar Directorate exceeded the sugar import limits set by the National Treasury last year by 102 percent despite a significant increase in production of the commodity.
  • Data from KNBS shows that the directorate issued permits that allowed the importation of 426,000 tonnes against 210,000 tonnes –the limit that was put in place for duty-free sugar.
  • Sugar coming in from Comesa countries does not attract duty as Kenya is a member of the business bloc that allows free movement of goods from partner states.

The Sugar Directorate exceeded the sugar import limits set by the National Treasury last year by 102 percent despite a significant increase in production of the commodity.

Data from the Kenya National Bureau of Statistics (KNBS) shows that the directorate issued permits that allowed the importation of 426,000 tonnes against 210,000 tonnes –the limit that was put in place for duty-free sugar.

The Treasury had in March last year slashed the amount of sugar that can be imported tax-free from the Common Market for Eastern and Southern Africa (Comesa) countries by a third as the government moved to tame the influx of the cheap sweetener following an outcry from farmers.

The Treasury said imports that exceeded the set limit would attract 100 percent duty, effectively protecting farmers and local sugar processors from rogue importers.

Sugar coming in from Comesa countries does not attract duty as Kenya is a member of the business bloc that allows free movement of goods from partner states.

The enhanced imports, however, did not help in checking the high cost of consumer prices with a two kilograme packet retailing at Sh260 in January this year from a low of Sh230 in the corresponding period in 2021.

According to KNBS, sugar production last year jumped to 700,000 tonnes when compared with 600,000 tonnes produced a year earlier, marking the highest volumes to have been realised in the last three years.

The high production was occasioned by an increase on the back of the high quantity of sugarcane that was delivered to factories, which hit 7.8 million tonnes in the review period.

“The area under cane production increased by 11.2 percent to 223,000 hectares in 2021 from 200,000 hectares in 2020,” said KNBS.

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

Kenya Sugarcane Growers Association has previously called for a new audit on the country’s sugar deficit, saying outdated data on the shortfall risks facilitating higher import volumes at the expense of local producers.

Kenya’s annual deficit has previously been projected to be about 350,000 tonnes, but this has so far been reduced by an increase in production over the years.

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