Cane poaching puts millers on the brink of shutdown

Tractors at Butali Sugar Company ferrying sugarcane to the miller for crushing. [Nathan Ochunge/Standard]

Sugar millers in Migori and Kisumu counties say they are on the brink of closure due to an acute shortage of sugarcane.

Sony Sugar, Chemelil, Muhoroni and Miwani are currently milling below their installed capacity, raising fears of a possible sugar shortage in the country.

The millers have blamed the prevailing cane shortage on unrelenting cane poaching by rival companies. Sony Sugar Company Managing Director Bernard Otieno, in an interview with The Standard, said they had lost billions of shillings invested in cane development extended to contracted farmers in form of loans.

“For example, we have lost about Sh1 billion invested in cane planting by the company over the last five years,” he said.

Mr Otieno said cane poaching had affected their income per capita and that if nothing was done to curb the practice, the miller could soon be forced out of business.

Erratic supplies

In the 2014/2015 financial year, Sony Sugar lost cane with a gross value of Sh391.9 million invested in 1,633 hectares of cane due to poaching.

Muhoroni and Chemeli also face the same problem. “If Sony sugar or Chemelil offers Sh3, 000 per tonne of cane, some millers offer Sh4, 000 or more. This is how we are being pushed out of the market’’ said Chemilil Managing Director Gabriel Nyangwesso.

Kenya produces about 600,000 tonnes of sugar annually, compared with annual consumption of 800,000 tonnes.

The deficit is covered through imports. Sugar production has declined from 126,362 tonnes registered last year to 104,907 tonnes by February this year due to erratic raw material supplies.

The country is allowed to import 300,000 annually from the region. Muhoroni, with an installed optimum crushing capacity of 2,500 tonnes per day, is currently only able to mill about 500 tonnes.