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Commodities

Sugar imports drop 43pc on huge stocks bought duty-free

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

Sugar imports dropped by 43 per cent in January following the presence of high volumes of the commodity that were shipped in during the duty-free window last year.

A market report from the Sugar Directorate indicates the volume of sugar imported to the country dropped to 38,829 tonnes in January this year from 21,982 tonnes in the same month last year.

The country imported over 900,000 tonnes of sugar between May and December last year as Kenya opened the duty-free window to allow traders to ship in the commodity outside the Common Market for Eastern and Southern Africa (Comesa).

“The number of traders seeking import permit has gone down in the recent months because of high volume of sugar in the country,” said Sugar Directorate.

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.

Increased quantities of cheap sugar in the local market has seen millers get stuck with growing stocks in the factories.

A report from the Sugar Directorate shows the volume held by millers last week grew from 12,000 last month to hit 13,224 currently.

The presence of cheap import sugar in the market has pushed the price of a two-kilogramme packet to between Sh195 and Sh215 from a high of Sh230 last December and Sh220 in January.

The market report from the Sugar Directorate indicated the volumes shipped in the country nearly tripled to 989,619 tonnes in the period under review from 334,109 tonnes in 2016.

The bulk of the sugar imports was of brown/mill white type (table sugar 829,871 tonnes), representing 84 per cent of the total consignment, while the balance was industrial sugar.

The Sugar Pricing Committee cut the ex-factory price of sugar last month from 4,700 on average to Sh4,250 for a 50 kilogramme bag.

The committee also cut the price of a tonne of cane paid to farmers from Sh4,025 to Sh3,700 coming as a relief to millers who have been pushing for cost reduction in the last couple of months.

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 imports.

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