Allow millers to import sugar, Sony tells govt

A man shops for sugar. FILE PHOTO | NMG  

By ELISHA OTIENO

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Summary

• Sugar production in the country has dropped as factories grappled with a cane shortage.
• Sugar sales from factories also dropped 44 per cent due to low production by local factories.
• The decline in local production saw consumers have to part with more cash between January and May last year.

Troubled Sony Sugar Company has asked the government to allow millers to import the commodity to meet local deficit as factories struggle with shortages of raw material.

“This will enable the factories to stay afloat in the wake of cane shortage in the farms,” said Mr Benard Otieno, the firm’s acting chief executive said Tuesday.

Sugar production has dropped sharply as factories in the western region grapple with cane shortage.

Data from the Sugar Directorate shows quantities produced dropped to 327,886 tonnes in the first 11 months of 2017 from 593,666 tonnes the previous year.

“This low production is attributed to the prevailing cane shortage in most cane growing zones,” says the report.

Sugar sales from factories also dropped 44 per cent due to low production by local factories.

READ: Factory sugar stocks rise on high imports

Private firms produce more

Private millers led in production with West Kenya manufacturing 66,798 tonnes followed by Kibos at 45,888 tonnes and Butali at 41,472 tonnes.

Sony Sugar produced the most among State-owned millers at 32,994 tonnes followed by Nzoia (26,677) and Muhoroni (17,888).

READ: Disposal of five State-owned sugar firms to be a hard sell

The decline in local production saw consumers have to part with more cash between January and May last year, with a kilo hitting a record high of Sh200.

The prices have, however, cooled off after the factory price of sugar dropped as high volumes of imports helped increase supply in the market.

According to the Directorate, a 50 kilo bag of sugar is currently selling at Sh4,000 at the factory down from Sh5,500 in August.

Sugar imports between January and November stood at 900,000 tonnes.

The Treasury scrapped duty on sugar imported from outside Comesa in May following a severe shortage.

Kenya produces about 600,000 tonnes of sugar a year, compared with an annual consumption of 870,000 tonnes.

The sugar deficit is usually plugged by strictly controlled imports from the Comesa trade bloc.

Sugar shortage was caused by drought in major cane growing zones that affected the crop in the field with the directorate estimating a shortage of 1.9 million tonnes at the end of last financial year.

READ: Sony Sugar seeks Sh657m waiver on tax