Local millers’ sugar stocks fall 41pc as cane shortage bites

Factory sugar stocks have dropped by 41 percent as millers struggle with cane shortage, which will see the regulator step up imports to stabilise consumer prices.

As of Tuesday, the available stocks held by millers stood at 7,000 tonnes against the optimal 12,000 that is required at any given time.

Head of Sugar Directorate Solomon Odera said the stocks had been ranging at about 7,000-7,500 tonnes in the last couple of months.

“The stocks available have been depressed by a lack of enough cane in the factories as the shortage persists,” he said.

Mr Odera said the optimum daily stocks required at the factories are meant to last the country for at least five days.

He said millers were selling almost all the stocks milled depleting inventories.

According to the directorate, production declined by seven percent in August compared to the same time last year following a poor performance in most of the factories resulting from a shortage of raw material.

Sugar imports in the eight months to August grew by 85 percent compared with the same period last year as the shortage in local production continues.

The move has seen the regulator step up imports of cheap sugar to bridge the local deficit and keep the cost of the commodity low.

According to the Sugar Directorate, imports of the sweetener between January and August stood at 285,883 tonnes compared with 154,225 in the corresponding period last year.

As a result, the price of sugar has dropped to as low of Sh205 for some brands from a high of Sh230 in July.

The regulator attributed the decline to sufficient stocks resulting from enhanced imports.

The Sugar Directorate normally issues import permits to traders to allow them to ship in duty-free sugar from regional countries.

Kenya is allowed to import 350,000 metric tonnes of sugar from countries to bridge the annual deficit.