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Commodities

Sugar prices fall 11pc on higher supplies

Sugar imports
Sugar imports to Kenya in the first two months of 2019 more than doubled compared with the same period last year. FILE PHOTO | NMG 

Consumer price of sugar has dropped by 11 percent coming in as a relief to households that are currently grappling with a high cost of living that saw inflation shoot to a two-month high in March.

The price of a two-kilogramme packet of branded sugar has now dropped to Sh205 from a high of Sh230 last month as the market responds to an increase of cheap sugar in the market.

The decline in price is also attributed to the release of sugar that had been confiscated by the government during the crackdown on illegal imports last year.

“The drop in ex-factory sugar prices is attributed to increased competition from cheap sugar imports in the market, prompting the local sugar factories to lower their prices for them to make sales,” says the regulator.

This is the first time in over six months that the retailers have lowered the price despite the fact that the ex-factory price of sugar has been on a downward trend since August last year.

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Sh4,082

The ex-factory sugar price started the year at a monthly average of Sh4,082 from a high of Sh6,000 last August before dropping to Sh3,868 per 50-kilo bag in February, according to the Sugar Directorate, which notes that the average ex-factory sugar price in February 2019 was five per cent lower than the monthly average witnessed in January this year.

Sugar imports to Kenya in the first two months of 2019 more than doubled compared with the same period last year following a decline in production, increasing availability of the cheap commodity in the market. Local sugar is normally expensive compared with the imported one given high cost of production in the country. Kenya usually gets the bulk of its imported sugar from the Common Market for Eastern and Southern Africa (Comesa).

The cost of production in some of the Comesa countries such as Mauritius and Swaziland is very low at an estimated Sh35,000 a tonne compared with Kenya’s Sh90,000 on average.

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