Despite Increased Duty-Free Sugar Imports By Kenya, Retail Sugar Prices Continue To Rise News Page
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Despite Increased Duty-Free Sugar Imports By Kenya, Retail Sugar Prices Continue To Rise

Published Date: May 10, 2023

In three months starting in January, Kenya experienced a sharp increase in sugar imports, rising to 93,000 tonnes from 46,000 in the same period last year. However, this increase was not successful in bringing down the high retail prices of the commodity. 

Sugar Pricing In Kenya 

According to data from the Sugar Directorate, the average cost per kilogram of sugar has increased to Sh157 from Sh150 in January due to a local shortage. According to Business Daily, the average price of a two-kilo packet of sugar on supermarket shelves has increased from Sh289 in February to over Sh300 today. Despite the government opening the first window for duty-free sugar imports as part of a larger plan to lower the high cost of goods and assist households in managing the rising cost of essential commodities, prices continued to rise. 

In order to stop an impending shortage in the nation that had driven up the price of the sweetener to Sh312 for a two-kilo packet, the government opened an import window in December that would allow traders to ship in 100,000 tonnes of sugar from outside the Common Market for Eastern and Southern Africa. 

Shortage Of Sugarcane 

Reduced cane supply to factories as a result of poor rains in previous seasons has had an impact on local production of the product. The price of a tonne of the commodity increased from Sh4,584, which is the sugar directorate's recommended price, to Sh5,250 as millers struggled to deal with the limited amount of cane that was available due to the declining supply that had caused a shortage. Due to a severe shortage, both state- and privately-owned mills are having difficulty milling, with the majority of them working at less than 30% of their installed capacity. 

State Decisions 

Additionally, the State has granted Kenya National Trading Corporation permission to import an additional 200,000 tonnes duty-free. Legislators from Western Kenya's sugar-growing regions have petitioned the government to speed up the review and implementation of the sugar task force report in order to revive state-owned millers. They argue that importation is only a temporary solution. 

The task force report makes recommendations for improving sugar marketing and trade by enhancing production, lowering production costs, coordinating Sugar Imports properly, stopping sugar smuggling and dumping, and enhancing packaging and traceability. The sugar levy should be reinstated, public sugar mills should be privatized to increase their productivity, and the Sugar Act should be passed, among other important recommendations. 

To raise the required revenue for assisting farmers to grow and develop their sugarcane, a sugar levy would be charged to consumers. The task force also outlined a number of reforms required to raise the productivity of the sugar industry and recommended strict adherence to the Common Market for Eastern and Southern Africa (COMESA) regulations. 

As Per State Governors 

Governors Kenneth Lusaka of Bungoma, Paul Otuoma of Busia, Ochilo Ayacko of Migori, Stephen Sang of Nandi, Fernandes Barasa of Kakamega, and Anyang Nyong'o of Kisumu are leading a group of legislators who have urged the government to work with strategic partners to expedite the return of smooth operations in the companies. Additionally, they demand that the government come up with a long-term solution that will ensure cane farmers a consistent market and prompt payment for their produce.  The county executives bemoaned the substantial debts that public millers still owe despite previous administrations' assurances that they would be forgiven. 

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