Kenya to import 5,000-tonnes of sugar to curb price rise

KENYA – The agriculture regulator has cleared the importation of 5,000 tonnes of sugar to curb a rise in consumer prices following a decline in stocks at local factories.

The stock has fallen to 4,000 tonnes against the minimum required level of 8,000 tonnes, exposing the country to shortages and price increases.

Agriculture Fisheries and Food Authority (Affa) director-general Alfred Busolo said the current level was the lowest in almost two years.

“We are importing as a mitigation measure to save consumers from the high prices that might result from the current shortage,” said Mr Busolo.

“The current stock is the lowest level observed in the last 23 months. This has resulted in destabilising the market as it suggests an eminent sugar shortage,” he added.

The falling stock has seen the factory price of the sweetener increase to an average Sh4,700 per 50 kilogramme bag as at May 24, up from Sh4,075 on May 15, according to Affa.

This sets the stage for review on consumer prices that have remained little changed since the start of the year.

Mr Busolo attributed the shortage to inefficiencies in the factories that has seen production drop, leading to delayed harvesting and late payment to farmers.

Kenya produces 630,000 tonnes of sugar a year, compared with an annual consumption of 900,000 tonnes.

The deficit is covered through the strictly controlled imports from the Common Market for East and Southern Africa (Comesa).

The domestic industry is enduring tough times and the leading producer, Mumias Sugar, posted a Sh6.31 billion loss for the year to June, hurt by falling revenue due to low production volumes.

Kenya had temporarily stopped imports in February when stocks shot to 15,000 tonnes to enable millers sell their merchandise with ease. But the imports resumed last month after stocks fell to 9,000 tonnes.

In January, Kenya cut sugar imports by 20 per cent in its bid to protect local millers as supply increased on the back of shipments from abroad.

Critics have blamed a high cost of production for the woes facing Kenya’s sugar industry. Poorly funded government factories have aging machinery prone to break downs.

May 30, 2016; http://www.businessdailyafrica.com/Regulator-clears-5-000-tonne-sugar-import/-/539546/3225566/-/32i173z/-/index.html

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