Kenya’s agriculture ministry is mulling to prevent a sugar shortage that could send prices soaring. The current window allowing duty-free sugar imports from outside the East African region is set to expire on April 6th, and officials are requesting a two-month extension.
Agriculture Cabinet Secretary Mithika Linturi is advocating for the extension of the existing waiver, which permits duty-free sugar imports from outside the Common Market for Eastern and Southern Africa (Comesa). The current waiver, scheduled to end on April 6, has prompted Linturi to propose a two-month extension to ensure the country’s sugar demands are adequately met.
In a letter addressed to the treasury, Linturi underscored the necessity of extending Gazette Notice 14093 dated October 13, 2023, and Gazette Notice No. 10358 dated 2024 until June 30, 2024. Kenya has been contending with challenges in local sugar production, prompting the suspension of sugar milling for three months last year to allow cane maturation on farms.
According to the CS, Kenya’s annual demand for table sugar stands at 1 million tonnes, averaging 84,000 tonnes per month domestically. However, current production trends indicate a projected domestic sugar deficit of 192,000 tonnes for the first half of 2024. To address this shortfall, Kenya aims to secure a total of 720,000 tonnes of table sugar between January and August 2024 through a combination of local production and imports.
With the ongoing global sugar shortage exacerbating the situation, Linturi emphasized the importance of granting importers more time to meet the rising demand. Kenya has previously authorized duty-free sugar imports from outside Comesa through various Gazette Notices. Notably, 100,000 tonnes were allocated in January 2023, followed by 180,000 tonnes in May 2023, and another 290,000 tonnes in August 2023. Additionally, 250,000 tonnes were allocated in October 2023.
Under the Common Market for Eastern and Southern Africa (COMESA) safeguards, Kenya is permitted to import at least 350,000 tonnes of sugar to fulfil local demand. Sugar imported from outside the regional bloc typically incurs a 50 per cent duty under the East African Community Customs regulations. In November, COMESA granted Kenya a two-year extension to manage imports of cheap sugar into the country.
In a recent development, Kibos Sugar company announced plans to relocate its refinery plant to Rwanda citing stringent regulatory challenges in Kenya. The decision follows the Kenyan government’s failure to grant the company special economic status, hindering its ability to export duty-free. Kibos has faced difficulties in commissioning its Ksh200 million (US$26.02M) facility, with an installed capacity of 150,000 tonnes, due to stringent trade laws governed by the East African Customs Management Act.
