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More imports as sugar production declines by 51percent

By Nicholas Waitathu | Published Tue, November 11th 2014 at 00:00, Updated November 10th 2014 at 20:40 GMT +3

The Government has defended importation of more sugar, saying the domestic output has declined by 51 per cent. This follows closure of four factories. The Sugar Directorate says the Government approved imports to stabilise prices as well as cushion the market from acute shortage of the commodity.

Four sugar factories – Mumias Sugar Company (MSC), West Kenya, Kibos and Soin sugar firms have been closed for maintenance leading to decline in production. The remaining seven operational factories - Chemelil, Sony Sugar, Nzoia Sugar, Butali, Transmara, Sukari and Muhoroni Sugar have on average not exceeded 1,500 tonnes daily in the last two weeks.

The Directorate's Interim Director Rosemary Mkok confirmed that as at the end of last week, the country stock reached at 1,028 tonnes. Politicians and farmers from western Kenya have criticised the Agriculture Livestock and Fisheries Cabinet Secretary Felix Koskei, claiming he approved importation of sugar while the country has enough stock.

Lugari MP Ayub Savula last week claimed that the State is flooding the local market with imports when there is enough stock locally.

Temporary closure

But Koskei maintained that the sugar shortage is real due to temporary closure of major producers. “We are importing just enough to stabilise the market until the companies closed for maintenance resume operations. We most importantly need to prevent inflation,” said Mr Koskei.

Ms Mkok said total imports in October 2014 reached 33,634 tonnes, which comprised 47 per cent brown or mill and 53 per cent of refined white sugar. The local market also benefited with imports from the Comesa free trade area countries that exported to Kenya 12,040 tonnes. “Total imports in January – October were 78,964 tonnes compared to 207,530 tonnes observed in the same period of 2013 - a 62 per cent decrease. Remarkable is the low imports of brown or mill white sugar worth 28,406 tonnes compared with 96,550 tonnes in January - October last year - a reason why our sugar stocks maintained a steady downwards trend, “ said Ms Mkok.

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She said the directorate has approved 21 firms to import 89,100 tonnes of brown or mill white. “This sugar is expected to be shipped in the next three months and will be imported from Uganda (37,600 tonnes), Zambia (24,500 tonnes), Madagascar (25,000 tonnes) and Egypt (2,000 tonnes).

Ms Mkok said the ex-factory sugar price range between Sh5,000 to Sh5, 100 per 50kg bag, up from Sh3,356 in March this year. “The price hike is in response to the sudden drop in sugar stocks and regulated availability of imported table sugar. Retail sugar prices are at an average of Sh117 per kg up from Sh100 per kilo in February 2014. At the beginning of the current financial year, production projections was 698,351 tonnes and thus will exceed last year's production of 600,179 tonnes by 16 per cent.”

She said the annual output have been revised downwards to 636,956, necessitated by low performance of MSC, delay in commissioning of Kwale Sugar Company and the closure of Kibos Sugar last month.

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