Low milling capacity, poor yields deepen sugar industry woes

Lack of a clear policy on cane development and low milling has left Kenya grappling with a sugar deficit despite new entrants in the past five years.

Of the 700,000 tonnes of sugar that the country requires annually, only 500,000 tonnes is produced, with the balance coming from the Common Market for East and Central Africa (Comesa) regional bloc.

Although lack of sugarcane is to blame, the former chairman of the Kenya Sugar Board (KSB) says the capacity of local sugar factories is too low to help meet the demand.

“Four of the new factories that have come up in the past five years have a crushing capacity of less than 2,000 metric tonnes in a day,” says Mr Saulo Busolo, who is a director of the sugar board.

Mumias, the country’s largest miller, has the capacity to produce 10,000 metric tonnes in a day, but is currently operating at excess capacity because of cane shortage.

Mr Busolo says massive investment is required in government-owned mills and views privatisation as a key step towards increasing production.

“Privatisation has become a common song in Kenya and is one of the conditions that were put in place when the Comesa window on safeguards was extended but to date nothing much has been done,” he said.

Sugar companies that are lined up for privatisation include Nzoia, Chemelil, South Nyanza and Miwani factories.

The woes in the sugar sector has been worsened by poor cane yields that have been going down every year despite an increase in the number of hectares under the crop. 

According to economic survey 2012, cane yield continued its five year decline, falling by 12.1 per cent from 58.8 tonnes per hectare in 2011 to 51.7 tonnes per hectare last year.

The biting shortage has sometimes forced millers to harvest premature crop for crushing, subjecting farmers and the factories to losses.

KSB says it has introduced fast- maturing cane that takes 12 months to be ready for harvesting instead of the current breed that takes up to 24 months. The safeguards, which are meant to protect the local sugar industries from cheaper Comesa imports, will expire in March next year.

The State is seeking another extension after failing to guide the sector towards competitiveness through privatisation and establishment of cane estates to reduce dependence on small scale farmers and ensure proper husbandry.

“The problems facing the industry is a result of the many sugar factories coming up without following laid down procedure on their establishment,” said Mr Noor Mohamed, chairman of the House committee on Agriculture while grilling KSB officials.

Under the Sugar Act of 2001 a factory must have proof of adequate raw materials to be licensed but this has purportedly been breached.

“The rules on licensing require that for millers to be licensed to operate, they must demonstrate adequate cane supply contracts,” said Ms Rosemary M’kok, KSB boss.