Market News

Wholesale sugar price eases on higher local production

sugar

A shopper buying sugar at a Supermarket. PHOTO | DIANA NGILA | NMG

Summary

  • Wholesalers are now selling the sugar at Sh5,700 from Sh6,200 last month, a drop attributed to increased local production due to higher volumes of cane delivery from farms in western Kenya.
  • The wholesale price had jumped by 23 percent at the beginning of last month from Sh5,050 to Sh6,200 due to a shortage in the market after a disruption in factories production in western Kenya.
  • Agriculture Cabinet secretary Peter Munya increased producers’ price of sugar cane from Sh3,833 per tonne to Sh4,112, effective November 18, with millers expected to pass this cost to consumers.

The wholesale price of sugar for a 50-kilogramme bag has dropped by eight percent, signalling a drop in shelf prices for consumers who have been paying more for the sweetener in the past few weeks.

Wholesalers are now selling the sugar at Sh5,700 from Sh6,200 last month, a drop attributed to increased local production due to higher volumes of cane delivery from farms in western Kenya.

A spot check by the Business Daily across supermarkets in Nairobi showed that a two-kilogramme packet of Kabras Sugar brand is now retailing at an average of between Sh249-Sh255, while Ndhiwa Sugar is selling at Sh275 from a high of Sh285 last month.

"The wholesale prices of sugar has retreated from the high of Sh6,200 last month to Sh5,700 for a 50-kilogramme bag, offering some relief from the sharp increase we had seen at the start of November,” said Benedict Gikunda, chief executive at sugar distributor Alesha Brands Limited.

The wholesale price had jumped by 23 percent at the beginning of last month from Sh5,050 to Sh6,200 due to a shortage in the market after a disruption in factories production in western Kenya.

In August and September, several factories grappled with production hitches following the breakdown of machines and shutdowns for routine maintenance.

The expectations of much lower shelf prices ahead of the festive season could, however, be dampened by the government’s move to increase cane supplier prices mid last month, in a move meant to encourage higher production from farmers and cushion them from increased production costs.

Agriculture Cabinet secretary Peter Munya increased producers’ price of sugar cane from Sh3,833 per tonne to Sh4,112, effective November 18, with millers expected to pass this cost to consumers.

The Crops (Sugar) (General) Regulations 2020 provide for a Sugarcane Pricing Committee responsible for developing the pricing formula and reviewing prices, which is based on the cost of the commodity on the shelves.

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