- The sudden rise in the commodity price according to Sugar Directorate has been occasioned by a 36 per cent drop in locally produced sugar in the month of April.
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Speaking to the Star on the phone, tax expert Julie Masava said there are concerns that a proposal in the Finance Bill to introduce an excise duty of Sh5 per kilo of sugar will further push up the prices.
A kilo of FD Nutrameal sugar is now retailing for Sh230 at Quickmart Stores and Sh220 at Carrefour, while the same quantity of Kabras sugar will cost you Sh215 in Naivas stores.
The sudden rise in the commodity price according to Sugar Directorate has been occasioned by a 36 per cent drop in locally produced sugar in the month of April.
The monthly data from the Directorate indicates that total sugar bagged in April 2023 declined to 31,970 metric tonnes (MT) from a total of 49,761 MT recorded in March as millers in the country suffered low supplies during the off season.
Head of the Sugar Directorate Wilice Audi had earlier warned that failure to meet the country’s sugar import quota from the Common Market for Eastern and Southern Africa due to an acute shortage of the commodity in the world market risked exposing local consumers to high prices.
“Total sugarcane milled by all sugar factories dropped to 405,389 MT in April 2023, down from 546,150 MT in March and 716,274 MT in February 2023. Sugar made therefore also decreased to 32,729 MT from 49,372 MT in March,” stated a monthly newsletter by the directorate.
The reduced local production coupled with low imports during the period under review meant consumers had to pay more for the commodity as a kilogram shot up 1.9 per cent as sales also decreased to 36,182 metric tonnes from 50,752 in March.
“The wholesale sugar prices for April 2023 averaged Sh 7,210 per 50kg bag, up 1pc from Sh 7,171 per 50kg bag in the previous month,"
"The retail sugar prices in April 2023 averaged Sh 160 per kilo up from Sh 157 per kilo in March and Sh 147 per kilo in February,” said the Sugar Directorate.
The directorate further says total closing stocks held by all factories as of the end of April this year dropped to 8,023 MT from 10,844 MT in March, while the weighted ex-factory price averaged Sh7,054 per 50kg bag, up 6pc from Sh6,659 per 50kg bag and Sh 5,432 per 50kg bag in February 2023.
In April, cost, insurance, and freight (CIF), Mombasa landed values for imported white refined sugar averaged Sh 79,571 per tonne compared to Sh 68,656 per tonne for mill white/brown sugar.
White Sugar Price Index averaged $675.69 per tonne, up from $586.92 per tonne in March and $560.46 per tonne in February.
The country’s weekly optimal stock has since dropped by a whopping 85 per cent in the past three months and price speculation around the Finance Bill, 2023 is likely to worsen the situation.
Speaking to the Star on the phone, tax expert Julie Masava said there are concerns that a proposal in the Finance Bill to introduce an excise duty of Sh5 per kilo of sugar will further push up the prices.
The stocks are expected to continue to drop as players speculate. If the Finance Bill, 2023 sails through, the sugar supply will drop, pushing up retail prices.
I anticipate up to Sh300 per two kilogrammes. Already, the directorate is recording weekly stocks of 4,000 tonnes against the required optimum of 20,000 tonnes in order to meet the daily requirement in the country.
President William Ruto’s government has exhumed confidence that the proposed law will sail through, indicating that his side has already accumulated a simple majority in the Parliament.
This is despite opposition from the public. Late last month, the Parliamentary Committee gathering public views on the Finance Bill received over 1,000 memorandums opposing the planned law.
Early this year, it warned that Kenya could fail to secure sufficient stocks of sugar at the international market even with the opening of duty-free imports owing to high prevailing global prices and a shortage of the commodity world over.