Editorials

Probe possible cartel role in sugar price increases

sugar-carre

A sugar section at a supermarket. FILE PHOTO | NMG

The latest increase in the price of sugar by up to Sh30 a kilo reeks of shady games by cartels keen on profiteering illegally.

Market reports showed a massive rise in the price of sugar as several factories grappled with production hitches due to the breakdown of machines and shutdowns for routine maintenance.

For example, a two-kilo packet of the sweetener, which retailed at Sh200 as late as August, has hit Sh230 in retail shops—a level last witnessed in January last year.

The cost is even higher in estate shops where sugar is selling at Sh240 for a two-kilo packet from Sh200 previously.

Officials attribute this to a breakdown of machines at Chemelil and Kibos sugar factories at a time when many millers had been shut for annual maintenance — leading to a huge backlog of cane to be processed and which has impacted total stocks in the country.

This coincidence is suspect. Cartels have previously deployed this strategy, especially around the electioneering period to create artificial sugar shortages in this country.

One wonders why most sugar factories in Kenya still close at the same time for repairs despite the obvious ramifications that would have on the demand and supply of the commodity.

You will recall that for many years, until 2002, it was the norm for cartels to create artificial sugar shortages through stage-managed factory breakdowns that coincided with annual factory maintenance programmes.

So bad was the fraud that when the Narc administration came to power in 2003, a section of parliamentarians demanded clear policy guidelines on the maintenance calendar of sugar factories to curb abuse by cartels.

The sugar business is very lucrative and cartels will always go to great lengths to exploit any loopholes for their shady profiteering schemes.

The State should urgently audit the present situation in the sugar industry to ascertain the factory breakdowns and mill downtimes due to routine maintenance.

Factory maintenance calendars should be spread out well to avoid scenarios whereby most millers suspended operations at the same time.