Sugar import plan stirs up sour debate

By Luke Anami

A proposal by the Government to import sugar from non Common Market for Eastern and Southern Africa (Comesa) countries is raising temperatures in the industry.

The call made by Agriculture Minister William Ruto has elicited sharp reaction from farmers and industry players, with some saying there is no sugar shortage in the market to justify the proposal.

"The Government is considering importing sugar from outside the Comesa region to alleviate sugar shortage," Ruto said last week, while launching the Horticultural Crop Development Authority strategic plan.

"The Agriculture Ministry is in consultation with the Ministry of Finance to work out importation modalities," he said.

But some sugar analysts have accused the minister of helping sugar barons to flood the market with cheap imports.

"The Government has failed to resuscitate the sugar industry even after research shows what is ailing the sector," Mr Peter Kegode, Sugar Campaign for Change chairman said in an exclusive interview with Financial Journal. Ruto, however, denied helping sugar barons.

"For the first time in many years, the ministry has ensured no scrupulous traders have been allowed to import sugar," Ruto said. "It is during my tenure that now sugar cane farmers are able to earn above Sh3,200 a tonne," he said.

Contrary to claims by millers there is no shortage, the situation on the ground shows supply is low and retail prices have shot up.

Kenya Sugar Board Chairman Okoth Obado claimed there is no sugar shortage in the country.

High prices

"The alleged shortage that is responsible for the current high price of sugar was due to closure of three sugar factories for maintenance," Obado said.

"The situation is expected to normalise soon because Mumias and Chemelil have since re-opened," said Obado.

While confirming the resumption of production by Mumias Sugar Company Managing Kidero Evans Kidero said the situation is expected to improve soon.

"Although there is a worldwide sugar shortage, the situation is not as bad in the country as it is being claimed," Mr Kidero said.

With more than six million dependents, analysts predict that the sugar industry could just have begun its "home stretch" to oblivion. And some farmers are waging a campaign for diversification from sugar to sorghum farming.

"Sorghum is drought resistant. It takes shorter to period to produce than cane and it is a raw material for production of ethanol," he said. Kegode said claims that there is sugar shortage in the country are not true.

full capacity

"Most sugar companies are producing at their full capacity. With Mumias Sugar Company having resumed full operations there is no cause for alarm as the Agriculture Minister wants us to believe," Kegode said.

"The Government is aware that most factories have to close once in a year for maintenance. Surprisingly, every time this happens, there are claims of sugar shortage," he said.

Kegode said some people are out to distort the market by claiming that there is a sugar shortage even when it is clear there are enough stocks in the country and Comesa countries.

He blamed the current marketing system, which allows traders to buy sugar from the millers to sell to retailers.

"The current system allows traders to buy sugar from millers at a low price, then see to retailers at high prices," he said.

He argued that Kenya is not ready for the planned lifting of Comesa safeguards protecting local millers from sugar imports.

[e-mail]