• Only five factories including Muhoroni, Transmara, Sukari, Kibos and West Kenya Sugar Companies operated continually in September.
• Closure of Mumias, Kwale and Chemelil sugar factories had a huge negative impact on sugar production, though Kwale was targeting to resume its operation by Friday.
Image: MAURICE ALAL
Sugar imports from January to September increased by 70 per cent, totalling 324,055 metric tonnes against 190,084 tonnes in the same period last year.
Sugar Directorate interim director Solomon Odera attributed the increase to a significant rise in table sugar imports this year to bridge the rising domestic demand against declining local production.
He said that table sugar imports were depressed in 2018 due to high stocks in the market resulting from huge duty-free imports in 2017.
“Moreover, sugar imported under the duty-free window was much cheaper than the Comesa sugar, thus discouraging importation from the regular suppliers. Kenya is a deficit producer and most of her production is targeted at local consumers. Moreover, Kenyan sugar is expensive and not attractive for export,” Odera said.
According to the September sugar report, prices at the factory in January were at an average of Sh4,082. They dropped to Sh3,868 per 50kg bag in February.
“The downward trend was halted in March 2019, where the prices settled at an average price of Sh3,912 per 50kg bag. However, the trend reversed, and saw the prices increase steadily in April and May with an average price of Sh3,990 and Sh4,632 per 50kg bag, respectively,” the report read.
Odera said due to the increasing pressure from cheap sugar imports, prices reverted to a downwards trend in September with a 50kg bag going for between Sh3,950 and Sh4,500.
In January, a kilo of sugar was retailing at Sh112 per kilo and reduced to Sh107 per kilo by March 2019.
“However, due to the increasing wholesale sugar prices, the downwards trend was unsustainable, resulting with the prices reverting to an upward trend to attain a maximum of Sh116 per kg in June. In the succeeding months, the prices dwindled further to Sh106 per kg in September,” Odera said.
He said sugar production dropped by eight per cent from January to September. The production was 335,992 metric tonnes compared to 366,398 metric tonnes achieved in the same period last year.
The decline was due to a fall in production in most sugar factories.
“The continued closure of Mumias, Kwale and Chemelil sugar factories had a huge negative impact on sugar production. Moreover, in the month of September 2019, Nzoia and Olepito sugar factories did not operate for maintenance, while Butali crushed cane for only 10 days, then closed for annual maintenance,” Odera said.
According to the September Sugar Report, only five factories including Muhoroni, Transmara, Sukari, Kibos and West Kenya Sugar Companies were in operation continually in September out of 13 sugar companies that are currently fully operational.
He said the industry is facing inadequate supply of sugar cane for milling, resulting to underutilisation of the sugar mills and thus a continued decline in sugar production.
Total sugar sales in January-September were in tandem with sugar production.
A total of 324,311 tonnes were sold in the period, compared to 348,380 tonnes traded in the same period last year, a drop of seven percent.
Odera said the total sugar closing stock held by all the sugar factories at the end of September was 10,878 tonnes against 17,866 tonnes observed in September 2018.