Sugar stocks fall, shelf price rises as contraband fight hits supply

Agriculture Cabinet Secretary Mwangi Kiunjuri. FILE PHOTO | NMG

What you need to know:

  • According to the Sugar Directorate, the volume dropped from a high of 18,000 tonnes in the last two weeks to current 12,000 tonnes.
  • Simultaneously, the shelf price of sugar has gone up by between Sh30 and Sh50 in major retail shops in Nairobi.

The volume of sugar held by millers is falling after a crackdown on contrabands as the retail price of the sweetener skyrockets.

According to the Sugar Directorate, the volume dropped from a high of 18,000 tonnes in the last two weeks to current 12,000 tonnes.

Simultaneously, the shelf price of sugar has gone up by between Sh30 and Sh50 in major retail shops in Nairobi.

Agriculture Cabinet Secretary Mwangi Kiunjuri though said on Wednesday there is enough sugar to last up to November, pointing out that the current price increase is due to lack of distribution.

“We are aware that shortages have been reported in parts of the country, which has led to a price hike, but this is just a problem with distribution because we have enough sugar in the country,” he said.

A two-kilo packet of Nutrameal is now retailing at Sh240 at Naivas up from Sh190 early this month while Kabras is retailing at Sh125 for a kilogramme up from Sh110. Other brands are conspicuously missing.

Huge imports were made during the duty-free window between May and December last year. This saw traders bring in 981,000 tonnes to bridge the deficit that had hit the country, helping to bring down the two-kilo packet prices to as low as Sh200 from a high of Sh400.

This slowed the sale of sugar by factories with millers stuck with huge volumes of the commodity which at one point in April hit a record high of 22,000 tonnes.

Ordinarily, millers are required to have daily stock of 9,000 tonnes, which is considered optimum.

Millers’ misery has been eased by the recent confiscation of over 500,000 tonnes of contraband sugar in the ongoing crackdown on illegal sweetener.

PAYE Tax Calculator

Note: The results are not exact but very close to the actual.