Sugar duty-free imports rise by 196% in 2017

KENYA – Sugar imports have increased by 196% in 2017 compared with the previous year as traders rushed to ship in duty-free commodity to bridge a local deficit.

A market report from the Sugar Directorate indicates the volumes shipped into the country nearly tripled from 334,109 tonnes in 2016 to 989,619 tonnes.

The bulk of the sugar imports was brown/mill white type (table sugar 829,871 tonnes), representing 84% of the total consignment, while the balance was industrial sugar used for manufacturing.

“The significant increase in table sugar imports is ascribed to huge importation of duty-free sugar between May and August 2017 to mitigate prevailing local shortage in the country,” says the report.

High imports were registered from non-Comesa countries during the period as more than three quarters of the consignment was imported from Brazil.

About 263,990 tonnes of the commodity were imported from Comesa Free Trade Area while 627,756 tonnes was shipped in from non-Comesa region.

The country imported 26,700 tonnes of sugar from East African countries last year, which is a decline from 39,109 tonnes in the same period in 2016.

Sugar production in the country dropped 41% during the same period as factories grappled with shortage of raw material.

The quantities produced dropped from 377,818 in 2017 from 639,742 tonnes in in 2016, highlighting the effects of drought.

Decline in production saw consumers pay exorbitant prices between January and May last year, with a kilo of the commodity hitting a record Sh200.

The prices have, however, cooled after the factory price dropped as high volumes of imports increased supply in the market, cutting the price to Sh115 for a kilo.

The Treasury scrapped duty on imported sugar from outside Comesa in May following a severe shortage of the commodity in Kenya last year.

Kenya produces about 600,000 tonnes of sugar a year, compared with annual consumption of 870,000 tonnes.

In other news according to Business Daily, the Sugar Directorate is also considering changing its procedures to peg licensing of millers on availability of cane from contracted farmers in the latest bid to curb poaching.

The interim Head of the Sugar Directorate Mr Solomon Odera said the move was one of the options meant to check disputes among rival millers over supply of cane.

The new development could see millers being licensed to operate for a certain period of time depending on the raw material available to sustain operations.

Applications from millers for new licences will be reviewed by the industry regulator at the end of the current financial year in June.

“We will allow for sufficient consultation on the issue but this is certainly one of the options we are seriously considering when reviewing applications for licences from millers to end cane poaching,” said Mr Odera.

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