The sugar industry could be headed for more turbulent times following fears that irregular imports may be making their way into the local market.
Millers in Western Kenya have expressed fear that part of sugar destined for Egypt has found its way into Kenya.
They also fear that a sugar glut that has depressed prices by between 14 and 22 per cent in the last one week may be caused by the release of huge consignments of duty-free sugar seized by the Government into the market.
Millers and farmers' representatives who spoke to The Standard were convinced that someone was taking advantage of the sharp rise in prices occasioned by the seizure of nearly 1 million tonnes of imported sugar to exploit the market.
Sony Sugar managing director Bernard Otieno said the drop in prices registered by both private and public millers in the Nyando and South Nyanza sugar belts were “definitely in response to a rise in supply.”
Sony is selling a 50-kilogramme bag of sugar at Sh5,800 from Sh6,200 a week ago following a sudden drop in demand across the industry.
In the Nyando sugar belt, factory prices dropped from Sh6,400 per 50-kilogramme bag to between Sh5,000 and Sh5,500.
Kibos Sugar managing director Raju Patel said the company had registered a big decline in demand, forcing it to lower prices for a 50 kilogramme bag to Sh5,000 from over Sh6,000 just a week ago.
Muhoroni Sugar Company receiver manager Francis Ooko said processed sugar was piling in company warehouses because of low demand. The company is selling sugar at Sh5,500 from Sh6,300 last week.
Kenya National Federation of Sugarcane Farmers Secretary General Atiang’ Atyang’ called on State agencies to investigate the source of the unexplained sugar supplies to protect the industry.