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Commodities

State bans sugar imports in reforms plan

Agriculture Cabinet Secretary Peter Munya at
Agriculture Cabinet Secretary Peter Munya at Kilimo House during the announcement of sugar reforms on July 2, 2020. PHOTO | SALATON NJAU | NMG 

Kenya has banned sugar imports with immediate effect and suspended trading licences as it moves to curb influx of cheap sweetener in the domestic market, which has impacted negatively on farmers.

Agriculture Cabinet Secretary Peter Munya pointed out that the imports had rendered Kenyan mills uncompetitive.

Mr Munya said the ministry had noted increased illegal importation, especially through the Busia border as unscrupulous traders take advantage of the Covid-19 curfew hours.

“We have also suspended pre-shipment approvals and extension of all sugar import permits until further notice,” said Mr Munya.

“The uncoordinated importation of brown sugar has rendered Kenya’s mills uncompetitive. Ex-factory prices for the mills remain at Sh85,260 for a tonne compared with the CIF price of Sh60,117 for the same quantity,” he added..

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In justifying the directive, the CS said the country was facing a sugar glut, which could potentially lead to the collapse of the industry.

The announcement comes just weeks after leaders from the western sugar belt raised concern that high imports had rendered local factories untenable, in turn impacting negatively on farmers.

Kenya is normally allowed to import 350,000 tonnes from the Common Market for Eastern and Southern Africa (Comesa) to fill the local deficit.

The move to stop shipments is likely to result to high cost of the commodity in the market as the cheap imports normally check on the high cost of the sweetener locally.

The CS made the announcement on Thursday when he pronounced a raft of reforms aimed at streamlining the sector that has for long been performing dismally.

Other reforms announced include leasing of State-owned sugar mills to private investors for a period of 20 years to process and develop cane on farms owned by these millers that include Muhoroni, Chemelil, Sony, Nzoia and Miwani.

Mr Munya said the long leases of State-owned firms will help increase farmers’ income and improve competitiveness and service delivery in the sugar sector. “Through comprehensive reforms, the government is determined to facilitate a multi-purpose sugar cane industry that is efficient, diversified and globally competitive,” said Mr Munya.

LOCAL PRODUCTION

Sugar imports in the first five months of the year rose 21 percent compared with a similar period last year even as local production improved slightly in the last two months.

According to Sugar Directorate, imports of the commodity between January and May stood at 207,814 tonnes against 172,213 tonnes in the same period last year.

Enhanced imports came amid a 15 percent increase in local production, with growth in yields attributed to a slight improvement in sugar cane supply to private millers.

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