KENYA – Kenya’s Ministry of Agriculture is seeking an extension on duty-free sugar imports to address a looming local shortage that could result in a surge in prices upon expiry of the current import window.
Agriculture Cabinet Secretary Mithika Linturi is advocating for the extension of the existing waiver, which allows duty-free sugar imports from outside the Common Market for Eastern and Southern Africa (Comesa).
The current waiver, set to lapse on April 6, prompted the CS to propose a two-month extension to ensure the country’s sugar requirements are met.
In a letter to the treasury, Linturi emphasized the need for extending Gazette Notice 14093 dated October 13, 2023, and Gazette Notice No 10358 dated 2024 until June 30, 2024.
Kenya has been grappling with local sugar production challenges, leading to last year’s suspension of sugar milling for three months to allow maturation of cane on farms.
According to the CS, Kenya’s annual demand for table sugar stands at 1 million tonnes, averaging 84,000 tonnes per month domestically.
However, current production trends indicate a projected domestic sugar deficit of 192,000 tonnes for the first six months of 2024.
To bridge this shortfall, Kenya aims to secure a total of 720,000 tonnes of table sugar between January and August 2024 through a combination of local production and imports.
With the ongoing global sugar shortage exacerbating the situation, Linturi stressed the importance of granting importers more time to meet the demand.
In previous allocations, Kenya authorized duty-free imports of sugar from outside Comesa through various Gazette Notices.
Notably, 100,000 tonnes were allocated in January 2023, followed by 180,000 tonnes in May 2023, and another 290,000 tonnes in August 2023. Additionally, 250,000 tonnes were allocated in October 2023.
Kenya is permitted to import at least 350,000 tonnes of sugar under the Common Market for Eastern and Sothern Africa (COMESA) safeguards to fulfill local demand. Sugar imported from outside the regional bloc typically incurs a 50 percent duty under the East African Community Customs regulations.
In November, COMESA granted Kenya a two-year extension to control imports of cheap sugar into the country after a delegation led by the council of ministers emphasized the necessity for additional time to gradually open up its market to imports.
Recently, Kibos Sugar company announced plans to relocate its refinery plant to Rwanda alleging stringent regulatory challenges in Kenya.
The decision comes after the Kenyan government failed to grant the company special economic status, hindering its ability to export duty-free.
Kibos has struggled to commission its Ksh200 million (US$26.02M) facility, with an installed capacity of 150,000 tonnes, due to stringent trade laws governed by the East African Customs Management Act.
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