Peter Munya slams brakes on cheap sugar

The Agriculture ministry has banned sugar imports with immediate effect, and suspended trading licences.

The move is meant to curb the influx of cheap sugar in the market, which has impacted negatively on farmers.

Agriculture Cabinet Secretary Peter Munya said the imports have rendered local mills uncompetitive because of their cheap nature.

Mr Munya said the ministry noted an influx of illegal imports, especially through Busia border as the unscrupulous businessmen took advantage of curfew hours.

“We have suspended all brown (table) sugar imports into the country with immediate effect. We have also suspended pre-shipment approvals and extension of all sugar import permits until further notice,” he said.

BROWN SUGAR

“The uncoordinated importation of brown sugar has rendered Kenya’s mills uncompetitive. Ex-factory prices for the mills remain at Sh85,260 for a tonne compared with the CIF price of Sh60,117 for the same quantity,” the CS added.

Mr Munya said the scenario explains why local sugar is struggling in the market against the imports.

He said the country may soon be faced with a sugar glut cause by the increased importation that would eventually lead to the collapse of the industry.

The announcement comes just weeks after leaders from western sugar belt raised concern that high importations had rendered sugar factories untenable, impacting negatively on farmers.

Kenya is allowed to import 350,000 tonnes from the Common Market for Eastern and Southern Africa to fill the deficit.

However, stopping imports is likely to result to high cost of the commodity in the market as the cheap imports usually check the high cost of the sweetener locally.

The CS made the announcement yesterday when he rolled out a raft of reforms aimed at streamlining the sector that has been a perennial dismal performer.

Other reforms announced include leasing of state-owned sugar mills to private investors for a period of 20 days to process and develop cane on farms owned by the millers that include Muhoroni, Chemelil, Sony, Nzoia and Miwani.

Mr Munya said the long leases of state-owned firms will help increase farmers’ income and improve competitiveness and services in the sugar sector.

COMPREHENSIVE REFORMS

“Through comprehensive reforms, the government is determined to facilitate a multi-purpose sugar cane industry that is efficient, diversified and globally competitive through enhanced industry competitiveness and cost reduction strategy,” the CS said.

Sugar imports in the first five months of the year rose 21 per cent compared with a similar period last year even as local production has in the last two months been recording slight improvement.

According to the Sugar Directorate, imports between January and May stood at 207,814 tonnes against 172,213 tonnes in the same period last year.

Enhanced imports came amid a 15 per cent increase in local production, with growth in local yields attributed to a slight improvement in cane supply to private millers. All the private mills registered improved productivity in the review period.

 “Sugar imported in January–May 2020 amounted to184,677 tonnes against 150,302 tonnes in the same period last year, a 21 percent increase, attributed to high table sugar imports in the review period to bridge local deficit,” said the directorate.