Kenya turns to Comesa for imports

KENYA – Kenya will import 12,500 tonnes of sugar from Uganda and Zambia to forestall the shortages that are expected following the closure of three of its mills for annual maintenance.

KENYA – Kenya will import 12,500 tonnes of sugar from Uganda and Zambia to forestall the shortages that are expected following the closure of three of its mills for annual maintenance.

Agriculture Cabinet Secretary Felix Koskei said the country would import 21,000 tonnes of sugar from the Common Market for Eastern and Southern Africa after Mumias, Sony Sugar and West Kenya shut down for repairs that could take upto six weeks.  

“We are doing this so that we can cushion the consumers from shortages or price increase as a result of these closures. We are also aware that close to 10,000 tonnes of cane are stuck at the factories and this is raising the possibility of a sugar shortage,” Mr Koskei said.

Sony, which will be shut for a month, has in its stores about 6,000 tonnes of unsold sugar. Mumias Sugar Company has closed down for 45 days and West Kenya for 30 days without leaving any stock to meet demand in the market.

Mr Koskei said a batch of 7,000 tonnes of sugar is expected in the country within a week. Kenya will import 10,000 tonnes from Uganda and a further 2,500 tonnes from Zambia, with the difference expected to be imported later in the month.

Early this year, Kenya won an extension of special safeguards on the importation of duty-free sugar from Comesa.

Kenya’s request for the extension was to help it jumpstart the ailing industry, with most of its sugar millers working below capacity.

Speaking at Comesa Heads of State Summit in Kinshasa, Foreign Affairs Principal Secretary Karanja Kibicho said Comesa’s Council of Ministers had agreed to extend the import quotas by one year to January 2015.

“We are happy that we have got this extension that will now allow us to limit the entry of imported sugar to 350,000 tonnes needed to meet the annual production deficit. Our request for extension of the safeguards was approved by the Comesa summit,” said Mr Kibicho.

It is estimated that Kenya’s annual domestic consumption of sugar stands at 728,000 tonnes while Kenya Sugar Board’s June 2014 estimates put the available stocks from millers at 20,202 tonnes.

Loss-making firms

Kenyan sugar millers posted a combined total loss of $67.1 million last year.

According to the Kenya Sugar Board, Mumias and Kibos Sugar are projected to have a deficit in cane supply this year. Despite this, the country has also seen a 7 per cent increase in sugar production from 125,185 tonnes in 2013 to 134,238 tonnes of sugar as at June this year.

Between March and June this year, Kenya imported 28, 891 tonnes of sugar, with 100 tonnes coming in from Comesa and other Free Trade Areas.

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“The cane available for crushing this year is 7,574,850 tonnes against the sugar miller’s requirement of 8,302,000 tonnes. This means that the industry is projected to have a deficit cane supply of 903,840 tonnes,” KSB said in its 2014/15 cane census.

November 3, 2014; http://www.theeastafrican.co.ke/business/Sugar–Kenya-turns-to-Comesa-for-imports–/-/2560/2507348/-/bgxgq9z/-/index.html

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