The Agriculture Food Authority (AFA) has recommended for suspension of sugar imports from the Common Market for Eastern and Southern Africa (COMESA) to allow for the mopping up of excess supply in the market.
In a plan that looks set to rev up the nation’s foreign earnings, Kenya is planning to start exporting excess sugar.
According to the authority’s Director-General Bruno Linyiru, sugar production in the country has increased over the last couple of months at 84,000 metric tonnes in monthly production against a consumption of 80,000 metric tonnes.
“We have more sugar than we need, so we are looking at exporting excess sugar produced by local millers in the market once the necessary legislations are put in place by the government,” said Linyiru in an interview with the People Daily yesterday.
He further explained that as a result of the excess sugar, ex-factory prices have come down considerably from Sh9,000 during the same period last year to standing at Sh5,200 now, hence bringing down the price of cane.
The sugarcane pricing committee, comprising the AFA, the Ministry of Agriculture, millers, and sugar producing counties – cut the cane prices to Sh4,950 per tonne in August marking a further drop since the start of the year and chopping earnings to farmers but handling relief to consumers of the sweetener on lower retail prices.
This marks a decline from a price of Sh5,125 per tonne in June. In February, a tonne of sugarcane was priced at Sh6100, which means that the cost of the raw material has fallen by 18.85 percent over the six months to August.
The authority, which is the regulator of the agricultural sector, said the export of the commodity will however start once it gets approval from parliament, adding that the move will enable farmers to continue access to the market, coming at a time millers are overwhelmed by cane deliveries due to a drop in factory price for cane supplied by farmers.
“Plans to export the excess sweetener means that going forward, millers will have to reduce their production capacity by 10 per cent to allow the stocks to reduce hence increase in prices which will translate into the increase in the price for cane,” Linyiru said.
The sugar export plan by AFA however, comes as a surprise as Kenya has for a long time relied on imports to plug a growing deficit in sugar production.
Annually, Kenya has been producing an estimated 800,000 tonnes of sugar against the 1 million tonnes demand each year, leaving a deficit of 200,000 tonnes.
The deficit is usually bridged by duty-free importation of the commodity owing to multi-year safeguards from COMESA.
According to official data, sugar production in the six months to June 2024 recorded a 123.4 per cent increase to 384,522 tonnes of sugar compared to 172, 105 tonnes they bagged in the preceding six months. It’s also an increase of 29.7 percent compared to the 296,382 tonnes they produced in the six months to June 2024.
The sugar export plan by AFA is a bit surprising bearing in mind that Kenya has for a long time relied on imports to plug a growing deficit in sugar production.
Kenya produces an estimated 800,000 tonnes of sugar annually but the demand stands at 1 million tonnes each year leaving a deficit of 200,000 tonnes.
The deficit is usually bridged by duty-free importation of the commodity owing to multi-year safeguards from Comesa.
Sugar millers have petitioned the government to halt duty free imports and stabilise the local prices to benefit farmers.
The Kenya Sugar Manufacturers Association in a letter to the Treasury PS, urged the government to put in place stringent measures to curb illegal sugar imports.
They raised concerns over unchecked influx of duty free imports, which they said is responsible for the current sugar crisis.
Association CEO Stephen Ligawa said, “Over the past five months, the price of a 50kg bag of local sugar has fallen by more than Sh1,300 from Sh6,300 in March 2023 to Sh5,000 presently. This significant reduction is primarily due to duty free and illegal sugar imports.”
He said at a meeting with the Agriculture PS in May, millers and farmers were assured the government would stop the imports and stabilise the prices.
