Sugar production drops 28pc in the first four months

Sugar production in the first four months of the year dropped by 28 per cent compared with the same period last year, pushing up the price of a 50-kilogramme bag to Sh6,150.

A Sugar Directorate report says between January and April, production of the commodity dropped to 172,722 tonnes compared with 238,872 tonnes in the same period last year.

“All the sugar factories reported decreased production except Muhoroni and Kwale. Notable is the low sugar production recorded in Mumias Sugar Company,” says the Sugar Directorate.

It says sugar production has been decreasing in the last four months due to the prevailing cane shortage in most growing zones.

Low production pushed sugar sales down by 25 per cent to 173,601 tonnes compared with 231,488 tonnes sold in the same period last year.

READ: Kenya faces local sugar deficit following biting cane shortage

According to the report, sugar closing stocks held by all the factories at the end of April 2017 was 2,481 tonnes against 7,923 tonnes in April 2016.

“Low sugar stocks being witnessed in this year is as a result of low local production and limited supply of table sugar imports,” adds the report.

Ex-factory sugar prices in April 2017 ranged from Sh4,700 and Sh7,200 compared with a range of Sh3,800 to Sh4,350 per 50-kg bag in the corresponding period last year.

“It is observed that the monthly average price (April 2017) is 51 per cent higher than Sh4,087 per 50kg bag observed in April 2016, resulting from high demand against low supply,” the directorate said.

The ex-factory sugar prices began the year at a monthly average of Sh5,398 per 50-kiogramme bag, before declining marginally to a low of Sh5,065. Thereafter the prices embarked on an upward trend to end April at an average of Sh6,154 per 50kg bag.