Sugar production drops 34pc on elections, annual factory repairs – Business Daily
Production fell to 46,459 tonnes in August from 70,278. FILE PHOTO | NMG
Sugar production in August dropped by 34 percent as more factories closed for maintenance amid scarcity of mature cane, subjecting consumers to higher prices of the commodity on shelves.
Total sugar production in August was 46,459 tonnes from the 70,278 tonnes recorded a month earlier, data from the Sugar Directorate shows.
The agency said that Kwale, Soin and OlePito factories had closed for maintenance in the review period while Nzoia and Chemelil, which were shut in May, resumed operations in August.
The directorate said the decline in production could also be attributed to disruption caused by the August 9 general elections.
“During the review period, the industry saw a significant decrease in the amount of sugar produced, attributed to a slowdown in activities due to the national elections as well as the closure of some sugar mills for maintenance,” said the directorate.
Sugar prices have been on the rise since August, with a two kilogramme packet now retailing at Sh300, up from Sh230 in June.
Wholesale sugar prices at the beginning of the year stood at an average Sh5,900 per 50-kilogramme bag, then fell to Sh5,600 in February.
From March to June, the prices remained fairly stable, however, in July the cost increased to Sh6,356 per 50 kilogramme bag, a 14 percent increase compared to the previous month.
The head of the Sugar Directorate, Willice Audi, said a number of factories lack mature cane for milling and this is negatively impacting production.
Kenya normally relies on imports from neighbours to bridge the local deficit amid rising demand from consumers.
The country is allowed to import up to 350,000 tonnes of sugar from the Common Market for Eastern and Southern Africa (Comesa).
However, the Treasury last year capped the imports at 210,000 tonnes in what was meant to protect local factories from an influx of cheap commodity.
Kenyan millers have always complained that the imports have made their sugar uncompetitive in the market. Most Comesa countries are spending up to $600 in production of a tonne of sugar compared with Kenya where factories incur as high as $900 to make the same amount.
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