Market News

Sugar imports up 61pc as production dwindles

cane

Limited cane production has led to a rise in imports. FILE PHOTO | NMG

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Summary

  • Data from the Sugar Directorate indicate the volume of sugar imported in 2019 increased to 458,631 tonnes compared with 284,169 the previous year.
  • The decline was attributed to poor performance of cane.
  • But even with enhanced cheap imports, consumer prices have remained high in retail shops.

Sugar imports rose 61 percent last year following a scarcity of the commodity that compelled the regulator to step up inflows.

Data from the Sugar Directorate indicate the volume of sugar imported in 2019 increased to 458,631 tonnes compared with 284,169 the previous year.

The decline was attributed to poor performance of cane.

“Overall, sugar imports in January-December 2019 totalled 458,631 tonnes against 284,169 tonnes in the same period last year, attributed to a significant increase in table sugar imports in this year to bridge the rising domestic demand against the declining local production,” says the report by the Directorate.

But even with enhanced cheap imports, consumer prices have remained high in retail shops.

In the last month of last year, the prices increased steadily to end December 2019 at a monthly average of Sh4,729 per 50kg bag.

Total sugar production in January-December 2019 was 440,935 tonnes compared with 491,097 tonnes achieved in the similar period in 2018, a drop of 10 percent.

The decline was due to a fall in production in most of the sugar factories, attributed to inadequate supply of cane.

The move has piled pressure on consumer prices that have shot up by Sh30. A two kilogramme packet of the sweetener, which retailed at Sh200 in November has now shot to Sh230, marking one of the steepest rises in recent months.

A spot check by the Business Daily showed most retail shops are selling different brands of the commodity at between Sh230 and Sh240, which implies that the falling factory prices have not reflected on the shelves.

The directorate says high demand of sweetener in December has spiraled over in January, forcing the cost of the commodity to take an upward trend.

According to the regulator, revenue from cane dropped by Sh1 billion in 2019 compared with the previous year as factories struggled with limited supply of raw material.