Kenya seeks two year extension of sugar imports limits

Kenya has requested a two year extension of sugar import limits from the regional trade bloc Common Market for Eastern and Southern Africa (COMESA) to revamp its ailing sugar industry, agriculture minister said.

The arrangement limiting imports expired at the end of last month and officials say increased imports could smother the Kenyan sugar business, which is not competitive and has a number of loss-making companies that are struggling to stay afloat.

Kenya is struggling to improve output due to relatively high production costs and loss-making sugar factories, which produce a total of 600,000 tonnes of sugar a year, below the annual consumption of 800,000 tonnes. The deficit is covered through strict import quotas from COMESA.

“It has come to an end but we are negotiating,” Felix Koskei said late on Thursday, referring to the import limits. “We have requested for an extension for two years.” Koskei did not say when the import limits could start if approved by COMESA council of ministers. It was not immediately clear if sugar were coming in freely as the government sought and extension.

Kenya was granted a one-year extension to the sugar import limits by COMESA in February last year to improve the sector, but has so far failed to fully implement such measures. East Africa’s largest economy had been expected to open up its market to imports from COMESA states by February last year, after more than a decade of being allowed to protect its sugar farmers with high tariffs.

It costs $600 (Sh54,600) to produce a tonne of sugar in Kenya, double the cost in regional producers like Sudan, and the cane variety cultivated in the country’s sugar belt takes 18-24 months to mature, double the 8-12 months in producers like Malawi.