Kenya witnessed an increase in the domestic sugar output in the first quarter of 2024. By August 2024, sugar output was 485,802 tonnes. This helped in easing sugar prices in the country, reports Star.
A report by the Agriculture and Food Authority, however, showed a constant drop in production that was witnessed in April and May for the local sugar industry production. This was mainly due to the temporary closure of Transmara and Sukari mills for maintenance and minor shutdowns at Mumias and West Valley, which took almost two weeks.
Production, however, rebounded in June and July to 75 500 metric tonnes and 84 500 metric tonnes, respectively, following the resumption of operations at Transmara and Sukari mills.
West Kenya Sugar factory led production during this period with 97,260 tonnes, followed by Naitiri with 65,420 tonnes, Kibos at 57,000 tonnes, Butali with 53,204 tonnes, and Transmara with 38,435 tonnes. Nzoia Sugar, Chemili, South Nyanza (Sony), Muhoroni, and Mumias were among the lowest producers, with 11,605, 17,575, 16,610, 11,984, and 24,397 tonnes, respectively.
Kenya relies on 17 sugar factories with a combined installed crushing capacity of 55,300 tonnes of cane per day. According to the AFA, Kenya’s annual sugar consumption stands at 1.1 million metric tonnes, with 950,000 metric tonnes designated for household use, translating to an average monthly consumption of 80,000 metric tonnes.
It noted that sugar prices had generally been falling since all sugar factories resumed milling in December 2023. This drop in sugar prices is due to improved availability, with recent production hitting 84 000 metric tonnes against a monthly consumption of 80 000 metric tonnes.
The consequences have been a massive drop in sugar prices to Sh5,128 per 50kg bag from Sh9,500 a year ago. More so, export orders increased following the surplus production.
The prices of canes have fallen from a high of Sh6,050 per tonne to the current Sh4,950. In June and July 2024, the can price was retained at Sh5,125 per tonne, a rate that was last reviewed on July 4.
It noted, however, that cane farmers expressed their dissatisfaction with these developments, particularly about the impact of value-added tax on transport, which they feel needs to be removed to better their earnings.
On sugar imports, AFA said the imports had declined considerably partly due to a court case that halted the imports and the current unattractiveness of the market due to low domestic prices. Imports of 4,300 metric tonnes of brown sugar were recorded in June 2024, majorly from Uganda and COMESA, compared to May’s import of 5,100 metric tonnes and April’s 22,992 metric tonnes.
This is a further decline from 24,582 metric tonnes and 28,477 metric tonnes of brown/mill white sugar imported into the country market in March and February 2024, respectively. The imports in January 2024 stood at 35,626 metric tonnes.
