Commodities

Kenya’s duty-free sugar imports triple

sugar

A customer picks sugar off the shelf at a supermarket in Nairobi. FILE PHOTO | NMG

Sugar imports grew threefold in 11 months to November 2017 compared with the previous year following the scrapping of duty on the commodity to bridge the local deficit.

A market report from the Sugar Directorate indicates the volumes shipped into the country tripled to 971,212 in the period under review from 290,256 in corresponding period the previous year.

The bulk of the sugar imports was of brown/mill white type (table sugar 829,111 tonnes), representing 85 per cent of the total consignment, while the balance was industrial sugar, which is used for manufacturing.

“The significant increase in table sugar imports is ascribed to huge importation of duty free sugar between May and August 2017 to mitigate shortage in the country,” says the report.

Large imports were registered from non-Comesa countries during the period as more than three quarter of the consignment was brught in from Brazil. 

About 250,259 tonnes of the commodity were imported from Comesa Free Trade Area while 622,646 tonnes was shipped in from non-Comesa region.

READ: Kenya’s sugar imports up 36pc in four months on shortage

There were zero imports from East African countries as the region, just like Kenya, grappled with a shortage of the commodity and retained local production for their domestic use.

Sugar production in the country dropped 45 per during the same period as factories grappled with the shortage of raw material to mill, affecting the sales, which also fall by almost similar margin.

The quantities produced dropped to 327,886 in the first 11 months of 2017 from 593,666 tonnes in corresponding period in 2016.

Decline in production saw consumers pay exorbitant prices for sugar between January and May last, with a kilogramme of the commodity hitting a record high of Sh200.

READ: Sugar production falls 45pc up to November

The prices have, however, cooled after the factory price of the commodity dropped as high volumes of imports increased supply in the market, cutting the price to Sh115 for a kilogramme of sugar.

The Treasury scrapped duty on imported sugar from outside Comesa in May following a severe shortage of the commodity in Kenya.

The country 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 the Comesa trade bloc, with the country having a quota of 300,000 tonnes annually.