Kenya slashes sugar imports from Uganda by 79% giving preference to Southern African countries

KENYA – Kenya has revised the allocated sugar imports quota for Uganda by cutting the allowable quantities of the commodity into the country by 79 percent.

The Sugar Directorate, according to reports by Business Daily, has highlighted that traders will only be allowed to import 18,923 tonnes of sugar from Uganda down from 90,000 tonnes that Kenya had earlier said would be shipped in from its landlocked neighbour.

Both countries had agreed in April that Uganda will export 90,000 tonnes of the commodity to Kenya as soon as the verification exercise on country of origin was completed, accounting for 43 percent of the total imports by Kenya from the Comesa region.

However, in the revised quota, countries from the Southern Africa will account for the largest share of imports under the regional market window.

This will see eSwatini lead the pack with 68,959 tonnes followed by Zambia at 41,152 tonnes and Mauritius bringing in 36,036 tonnes.

Despite Kenya allowing sugar imports from other countries, the country has capped the duty-free imports from the trade block to 210,000 tonnes from 350,000 tonnes to boost local production.

According to a recent GAIN report by USDA, sugar production in Kenya is expected to increase by 8 percent in Marketing Year (MY) 2021/22 to 650,000 metric tonnes (MT) due to an increase in sugarcane yields following good weather conditions, better agronomic and harvesting practices.

The rise in sugar production is also attributed to the both the public and private sector increasing investments in mills, resulting to higher out-put of the sweetener.

Some private mills have expanded their cane buying operations into zones that were previously reserved for state-owned ones.

The private investors are also looking to open new mills in Siaya, Kilifi, Kisii, Uasin Gishu, and Tana River counties.

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Currently, private mills make up 74 percent of total sugar production in Kenya and tend to be attractive to farmers due to their high operational efficiency.

During the period under review, consumption is expected to increase by 5 percent in MY 2021/22 to 1 million MT as hotels and restaurants re-open following COVID-19 pandemic.

The move by Kenya to cut sugar imports from Uganda is likely to escalate the ongoing trade dispute between the two nations.

Last month, Uganda protested Kenya’s delay in abolishing the seven percent levy on milk imports following recent bilateral talks meant to resolve the stalemate.

Prior to that, Kenya had with immediate effect banned the importation of maize from Tanzania and Uganda in March, citing safety health concerns, which was later lifted.

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