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Commodities

Dar ethanol ban to boost local demand in rush for sanitisers

A matatu conductor dispenses a sanitiser
A matatu conductor dispenses a sanitiser as people board in Nairobi last week. PHOTO | FRANCIS NDERITU | NMG 

Demand for locally produced ethanol is set to rise after Tanzania banned all exports to Kenya to facilitate manufacture of sanitisers and disinfectants.

The ban imposed last week by Trade minister Innocent Bashungwa follows growing demand in the neigbouring country.

Ethanol is a key ingredient in manufacture of the two products that will help in the fight against the coronavirus pandemic.

"Ethanol producers should also increase production to meet local demand for raw materials used in making sanitisers," he said in a statement.

Tanzania has been a major source of ethanol for Kenya's spirits and bio-ethanol manufacturers, spawning rampant smuggling to evade steep taxation.

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Unscrupulous importers have also been using Tanzania as a smuggling route for Kenyan-made ethanol that is 'exported' to Tanzania and 'imported' by Kenyans at zero-rated terms.

Last week listed sugar miller Mumias announced plans to distil ethanol for local use to boost its income revenues.

In Kenya, all dealings in ethanol have been decriminalised to allow free movement from local processors to sanitiser makers.

Spectre International, Mumias Sugar Company and Muhoroni-based Agro Chemicals are the main ethanol producers who source molasses from Muhoroni, Miwani, Kibos, Chemilil, Sony, Soin, Mumias, West Kenya, Butali, Transmara and Nzoia sugar companies.

Ethanol’s use as a cooking fuel is also on the rise, thanks to the logging ban now in its third year.

The ban has seen Kenyans embrace use of cooking gas and bioethanol stoves away from the traditional charcoal-based fuel. Spectre, associated with the Odinga family, produces 30 million litres of ethanol, Agro Chemicals (18 million) and Mumias 16 million annually.

Kenya has scrambled to boost ethanol supply including ordering release of stocks held by law enforcers as the crisis mounted.

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