Millers cry foul over influx of ‘strange’ sugar

Sugarcane millers have questioned the ‘mysterious’ surplus of the sweetener in the market, a situation that has left them with unsold stocks.

Firms say over the last 10 days, they have hardly made significant sales warning that the situation could adversely affect prices for cane deliveries.

Kenya Sugar Manufacturers Association (Kesma) chairman Jayanti Patel said they will issue a statement on the issue.

“We will issue an official communication regarding the matter later,” Mr Patel, who is also the Butali Sugar Company managing director, told Sunday Nation on phone.

Sony Sugar managing director Bernard Otieno said the surplus sugar could be as a result of availability of customs bonded sugar that is flowing in from Uganda through Busia and apparent release of duty-free imports held from 2017.

“The supply could be dominated by dumped sugar that is being re-exported from Uganda and posing as local production,” he said.

If the trend continues, he cautioned, the market could collapse as the price of locally produced sugar has taken a drastic drop to stand at Sh4,500 per 50 kilogramme bag from Sh6,200 seeks ago.

“This has slowed down cash flow since factories are not selling sugar due to low demand from local traders,” said Mr Otieno.

His counterpart from Chemelil Sugar Company Gabriel Nyangweso said the influx of the sweetener has started taking a toll on the company as over 20,000 bags lie in their depot.

“We are concerned that we might not be able to pay our farmers if things remain unchanged in the next one week,” said Chemelil Sugar Company’s new chairman Zedekiah Bundotich.

Mr Bundotich urges the government to urgently address the issue of cartels choking the sugar industry to safeguard the lives of thousands of farmers who rely on the cash crop.

Chemelil factory, which resumed operations after a six-month break, is currently operating at half capacity and crushing 1,400 tonnes of cane sugar per day.

Due to the declining market, the sugar is sold mainly in Kisumu, Kericho, Nandi Hills and Kapsabet, said Nyangweso. He, however, revealed that they are exploring Eldoret, Baringo and Nakuru as they attempt to expand their reach.

Mr Bundotich further warned that the move by the standard gauge railway to discount freight costs from Mombasa to Nairobi by 50 per cent could adversely affect the price of local sugar.

“This means that the price of imported sugar could further fall by half while the local sugar is disadvantaged by higher transport costs due to the introduction of 8 per cent VAT on petroleum products which has shot up the cost of fuel,” he said.

To protect the industry, millers called on the Kenya Revenue Authority and the Kenya Bureau of Standards to test and ascertain the products in the market are in compliance.