Kenya sugar imports increase 130% in first quarter on declining production

KENYA – Kenya sugar imports increased by 130% in the first quarter of 2019 compared to imports recorded in a similar period last year as attributed to a decline in local production recorded in the period.

According to a report by the Sugar Directorate, sugar imports between January and March 2019 climbed up to 113,516 tonnes compared with 49,445 in the corresponding period last year.

“Sugar imported in January–March 2019 totalled 113,516 tonnes against 49,445 tonnes in the same period last year, a 130 percent increase, attributed to low table sugar imports in 2018 due to huge stocks of cheap duty-free sugar in 2017,” said the directorate.

During the period under review, local production plunged 14% while the average monthly ex-factory sugar price rose to Sh4,082 (US$40.82)at the beginning of the year before declaiming to Sh3,912 (US$39.12) in March for a 50 kg bag.

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However, the sugar prices in March reflected an increase compared to the average monthly prices in February which stood at Sh3,868 (US$38.68) for a 50-kilo bag, reports the Business Daily.

“The slight improvement witnessed in March 2019 is an indicator that the ex-factory sugar prices downward trend has reversed.

“However, the upward trend will largely depend on sugar imports and pricing,” the Sugar Directorate said in the report.

Despite an increase in imports, total sugar sales in the review period were 142,717 tonnes compared with 151,869 tonnes sold in the same period last year, representing a 6% decline.

Moreover, total sugar closing stock held by all the factories at the end of March was 7,021 tonnes against 20,770 tonnes in March last year while the consumer prices dropped 11% in the period.

This was attributed to increased competition from cheap sugar imports in the market which prompted the local sugar factories to lower their prices for them to make sales.

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In addition, the country’s food imports in the first two months of the year hit US$2.873 million (Sh28.73bn) as the second highest level,  attributed to declining local production following depressed rainfall.

Increased purchase of food from foreign countries from the second half of 2017 through early 2018 followed a waiver of import duties between mid-May and December 2017 on food items such as maize, milk powder and sugar.

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