Kenya dangers sugar disaster on scarcity in world market


Kenya dangers sugar disaster on scarcity in world market


Sugar imports. FILE PHOTO | NMG

Kenya may fail to safe shares of sugar on the worldwide market even with the opening of duty-free imports owing to excessive prevailing world costs and a scarcity of the commodity world over, a transfer that can preserve the associated fee excessive on the cabinets.

Sugar Directorate head Willis Audi says the price of sugar within the world market stays excessive and this may increasingly hinder imports.

The federal government opened an import window in December that might see merchants ship in 100,000 tonnes of sugar outdoors of the Frequent Marketplace for Japanese and Southern Africa (Comesa) area to curb an imminent scarcity that has pushed up its value.

READ: Kenya to fall in need of Comesa sugar import quota

“We’re not positive if there may be that sugar available in the market and whether it is there, the costs may be larger and this may increasingly affect imports,” he mentioned.

Final 12 months, merchants struggled to ship within the quota Kenya had been allotted by the Comesa, bringing in 115,000 tonnes in opposition to the required 180,000 tonnes by the tip of final November.

Mr Audi mentioned regardless that the December figures are but to be out, merchants may have solely imported barely over 10,000 tonnes.

The tightening provide available in the market noticed the value of the commodity shoot from Sh6,787 in October to Sh7,149 for a 50-kilo bag in November final 12 months, in line with the Directorate.

Imported sugar costs landed in Mombasa at Sh85,000 a tonne in November in contrast with Sh83,000 in October, highlighting the affect of the scarcity of the commodity.

The Treasury waived the responsibility in December to permit merchants to convey the commodity outdoors of the regional market as sugar coming in from different components of the world attracts at the least 50 p.c responsibility underneath the East African Group’s widespread exterior tariff.

The sugar costs on the planet market have been risky within the final 12 months with a tonne of the commodity hitting a excessive of $522 on Monday (January 9) in comparison with $509 across the similar time in 2021, in line with the Worldwide Sugar Organisation.

Kenya depends on imported sugar to fulfill its annual deficit which has now grown to 1 million in opposition to the manufacturing of 800,000 tonnes yearly.

READ: Kenya will get one other sugar imports cowl

The Comesa nations the place Kenya is allowed to import the commodity from, are promoting their produce to different world areas particularly the European Union owing to the nice costs that it fetches there.

Based on the Sugar Directorate, within the EU costs are larger by at the least $20 per tonne in comparison with inside the area.

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