Shortage of cane cuts sugar production 49 per cent

KENYA – Sugar production in the nine months to September dropped 49 per cent as factories grappled with cane shortage.

A monthly report from the Sugar Directorate indicates quantities produced dropped to 252,415 from 493,419 tonnes in the corresponding period last year thanks to dry weather.

“This low production is attributed to the prevailing cane shortage in most cane growing zones,” says the report.

Private millers led in production with West Kenya manufacturing 53,000 tonnes in the period under review followed by Kibos at 35,000 and Butali at 33,000 tonnes.

Sony Sugar Company produced the most among the State-owned millers at 28,000 tonnes followed by Nzoia (18,000) and Muhoroni (13,000).

The decline in production saw consumers pay exorbitant prices for sugar between January and May, with a kilo hitting a high of Sh200.

The prices have, however, cooled off after the factory price of sugar dropped as imports helped increase supply in the market.

According to the directorate, a 50 kilogramme bag of sugar is currently selling at Sh4,000 at the factory gate down from Sh5,500 in August.

Its statistics show imports between January and July this year amounted to 245,168 tonnes.

The Treasury in May scrapped duty on imported sugar from outside the Common Market for Eastern and Southern Africa (Comesa) following a severe shortage of the commodity that saw a kilo cross the Sh200 mark.

Although the window was supposed to end in August, a special gazette by Treasury secretary Henry Rotich extended this to December 31, 2017.

Kenya produces about 600,000 tonnes a year, compared with annual consumption of 870,000 tonnes. The sugar deficit is usually covered by stringently controlled imports from Comesa.

Sugar shortage was caused by drought in major cane growing zones with the directorate estimating a shortage of 1.9 million tonnes at the end of the last financial year.

Business Daily

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