KENYA – Kenya has announced the lift of the ban on molasses exports, a critical ingredient in spirit production, after a suspension that began in February last year.
This decision comes despite local distillers facing challenges and citing shortages of molasses, leading to concerns about the impact on the local alcohol production industry.
The government was forced to suspend exports of molasses after much of it was diverted to the neighbouring market leaving local distillers without the input used to prepare ethanol.
The Acting Director of the Sugar Directorate, Jude Chesire, announced the lifting of the suspension in a letter to all sugar millers.
The decision was based on the completion of a verification exercise, revealing that millers currently hold excess molasses.
Chesire said in a letter, “In compliance with the presidential pronouncement, the suspension of molasses is hereby lifted. This is, therefore, to inform you of the resumption of molasses exports for a period of 45 days effective from 6th February 2024. The authority is subject to review.”
Chesire emphasized that priority should be given to local distillers and farmers for local use. Typically, 80% of locally produced molasses, a by-product of sugar production, is allocated to distillers, while farmers receive 10%, and the remaining 10% is exported.
However, local distillers expressed dissatisfaction with the decision, claiming that they are still grappling with a shortage of molasses, exacerbated by increased illegal exports.
Mohan Galot, Chairman of London Distillers, one of the major players, voiced concerns about the impact on production, stating, “The lifting of the ban is in bad taste and will certainly affect our production. The supply of molasses has not improved, and we are still paying a high price for it.”
The shortage of molasses has led to operational challenges for distillers, with Agro-Chemical and Food Company Limited (ACFC) having to suspend operations due to limited molasses supply. Kibos, a Kisumu-based sugar miller, is also facing challenges.
In October 2023, the price of molasses surged nearly tenfold since July 2022, reaching Sh50,000 per tonne. This increase was attributed to illegal exports diverting a significant portion of the raw material to Uganda.
Local distillers are still grappling with the repercussions of the shortage and the resulting spike in prices, impacting the cost of production for spirits like wine, gin, and whisky.
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