Market News

Private firms top as sugar supply falls nearly a third

Cane supply is dropping. FILE PHOTO | NMG
Cane supply is dropping. FILE PHOTO | NMG 

Sugar production in quarter one dropped by 28 per cent compared with the similar period last year on low cane supply, with private millers dominating manufacturing.

A monthly report by the sugar directorate shows production between January and April dropped to 172,722 tonnes this year from 238,872 tonnes last year, pushing shelf prices to Sh370 high for a 2-kilo packet.

“All the sugar factories reported decreased production except Muhoroni and Kwale,” says the Sugar Directorate report.

West Kenya Sugar Company led production having produced 37,380 tonnes, followed by Butali’s 27,601 tonnes then Kibos at 21,195. The three are private firms.

State-owned Sony factory recorded an impressive performance by producing 17,000 tonnes, outperforming some of the private millers like Trans-Mara Sugar that had 16,000 tonnes.

Sugar production has been on a falling trend in the last four months, what the directorate attributes to drought in most of the growing zones.

Low production hit total sugar sales that stood at 173,601 tonnes in the period under review compared with 231,488 tonnes sold in the similar period last year, a decrease of 25 per cent.

Closing stocks held by all the sugar factories at the end of April were 2,481 tonnes against 7,923 tonnes realised 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,” says the directorate.

Kenya produces 600,000 tonnes of sugar annually and relies on imports to meet the growing demand that currently stands at 900,000 tonnes.