Relief as sugar prices fall, duty-free imports double
An attendant arranges sugar on shelves at Bidii Supermarket in Elburgon Town, Nakuru County on September 09, 2023.
What you need to know:
- Data from the Sugar Directorate shows retail sugar prices averaged Sh224 per kilogramme in August, down from Sh229 in July.
- Kenya extended duty-free importation of the commodity on August 9, 2023, allowing traders to bring in more volumes to sate demand.
Sugar prices dropped in August for the first time in two months after imports more than doubled, helping fill the deficit left by a sharp decline in local production of the sweetener.
A spot check in supermarkets yesterday showed the prices had dropped further, settling at an average Sh210-220 a kilo.
Data from the Sugar Directorate shows retail sugar prices averaged Sh224 per kilogramme in August, down from Sh229 in July.
Wholesale sugar prices also fell to an average of Sh9,624 per 50 kilogramme bag in August 2023, down seven per cent from Sh10,369 per 50 kilogramme bag in July.
The decline followed bumper importation during the month as shipments more than doubled by 111 per cent to 57,250 tonnes up from 27,179 tonnes in the previous month.
These include 47,904 tonnes of table sugar and 9,346 tonnes of white refined sugar.
Kenya extended duty-free importation of the commodity on August 9, 2023, allowing traders to bring in more volumes to sate demand.
A sharp drop in local sugar milling – coupled with higher global prices – has increased the prices of sugar at the fastest rate of any food commodity over the last year.
Sugar is used to sweeten drinks such as tea and coffee, manufacture of soft drinks such as juices and soda, baking of popular foods such as bread, and biscuits, pastries, manufacture of pharmaceuticals such as syrups, and in beauty products.
According to the Directorate, total sugarcane milled by all sugar factories dropped by 25 per cent to 295,809 tonnes in August 2023 from 395,232 tonnes in July and 436,694 tonnes in June.
As a result, the total sugar produced (bagged) in August 2023 was 27,680 tonnes, a 17 per cent drop from 33,246 tonnes in July.
“The drop is attributed to the closure of mills in the western and Nyanza regions, occasioned by lack of mature cane,” it said.
Commercial sugarcane production in Kenya is concentrated in western, Nyanza, Rift Valley, and coastal regions.
Local millers have been facing a severe shortage of raw material this year having largely depleted stocks of mature crop.
This forced some to start crushing immature sugarcane leading to lower sugar produced.
To manage the shortage, some millers also cut their crushing schedule to just a few days within a week to allow them to mop up sufficient crop from farmers. Others also temporarily closed their factories to do maintenance and upgrades.
