Sugar imports drop on swoop

Sugar imports fell to a multi-year low in the nine months ended September as traders shied away from shipping in the commodity following increased scrutiny by State enforcement agencies.

Some 189,620 tonnes of the sweetener were brought in to bridge the deficit in domestic production, data from the Sugar Directorate indicate, a sharp drop from 933,847 tonnes in the same period in 2017 and 219,118 tonnes in 2016.

The Treasury scrapped import duty on the commodity last year following a sharp decline in local production due to a biting drought that saw average retail price a kilo jump as much as Sh179 in May 2017.

The duty waiver from July last year resulted in a market glut earlier this year, pushing down consumer prices as low as Sh75 a kilo.

State agencies such as the Kenya Bureau of Standards launched a countrywide crackdown on counterfeit and substandard foreign-made sugar in May, confiscating more than 500,000 tonnes of the commodity.

The Sugar Directorate estimates local production by the country’s 12 millers in the review period at 362,018 tonnes, a 43.42 per cent growth over 252,415 tonnes in the same season last year on improved rains.

The January–September 2018 local output is, however, 26.64 per cent less than 493,519 tonnes milled in the first nine months of 2016.

“All the sugar factories, with the exception of Muhoroni Sugar Company, recorded an improved production as compared to the same period last year,” the directorate said.

“The production was further boosted by operationalisation of Olepito Sugar Company and inclusion of processed bulk sugar imports at West Kenya and Sukari mills.”

The sugar millers were holding 15,762 tonnes of sugar in their warehouses at the end of September, three times more than 5,224 tonnes a year earlier, the sugar industry regulator said.