Sugar prices rose to an eight-month high in a period that imports dropped 58 per cent following crackdown on contraband.
Data from the Kenya National Bureau of Statistics (KNBS) show a kilogramme of sugar in July on average retailed at Sh137.70—the highest level since December.
Traders have linked the rise in the price of the sweetener on reduced supply following a dip in imports as importers shied away from shipping in the commodity due to a market glut and the crackdown on foreign made sugar.
A market report by the Sugar Directorate indicates total sugar stock in the six months to June stood at 358,000 tonnes compared to the 439,000 tonnes in the same period last year, representing a drop of 18 per cent.
The reduction was due to the 58 per cent drop or 138,844 tonnes cut in imports, which could not be offset by rise on local production from 201,992 tonnes to 259, 826 tonnes in the review period.
The consumer price of sugar fell towards the end of last year as volumes held by millers rose due to stiff competition between imports and local produce.
More than 500,000 tonnes of contraband sugar has been confiscated in the ongoing crackdown.
The Sugar Directorate has been regulating the volume of imported sweetener to an average of 7,000 tonnes a month from highs of 29,000 tonnes in an ideal situation.
It recently said that the number of traders seeking import permit had gone down in the recent months because of the glut.
The Treasury scrapped duty on the commodity last year following a sharp decline in production that saw the price of sugar go up to Sh400 per two kilo packet.
Kenya produces about 600,000 tonnes of sugar a year, compared with annual consumption of 870,000 tonnes.
The sugar deficit is usually covered by stringently controlled imports from Comesa trade bloc with the country allowing in only 300,000 tonnes annually.