A kilo of sugar to retail at Sh100, 56,000 tonnes have been imported, says Bett

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By Agatha Ngotho. The Star — June 5, 2017.

The national government has assured citizens that sugar prices will decrease to between Sh100 and Sh110 per kilo.

Agriculture CS Willy Bett on Friday said the decrease in cost is due to the importation of 56,000 metric tonnes of sugar.

Currently, the average price for a kilo is Sh200, a 53.8 per cent increase from Sh106 per kilo in January.

The price of a 50-kilo bag had reached Sh9, 000, but is now retailing at Sh5, 500.

Bett said the reduction in price should be reflected in supermarkets.

Bett said Kenya has been grappling with a shortage of sugar following a 25 per cent reduction in sugar production in Comesa countries such as Swaziland, Malawi, Zambia, and Zimbabwe.

Kenya produces slightly above 600,000 tonnes annually from 10 factories, against a demand of 870,000 tonnes. To bridge the deficit, Kenya imports its sugar from the countries within the Comesa region, under a protection window.

A tonne in Kenya sells at Sh120,000, and Sh40,000 globally. Sugar interim directorate head Solomon Odera said imported sugar is going for Sh6,300 for a 50-kilo bag, while local sugar is retailing at between Sh6,800 and Sh7,200 for the same quantity. A report by Tegemeo Institute on the sugar situation in the country indicated retail prices increased by 28.3 per cent from Sh5, 300 to Sh6, 800 for a 50-kilo bag between March 2016 and March 2017.

Retail prices further increased by 4.6 per cent from Sh6, 500 in January to Sh6, 800 in March 2017.

Kevin Onyango from Tegemeo Institute in a press briefing said the price is higher in Kenya than the average global price. This, he said, can be attributed to the high cost and inefficiencies in production, at farm and processor levels.

A report by the Agriculture and Food Authority last December revealed the hike in wholesale, and the price of refined sugar were due to the increase in world raw sugar price over the past three months.

In June, the European Union said sugar prices were expected to rise by 30 per cent, amid a decrease in production and high demand.

AFA director general Alfred Busolo said Kenya was already experiencing a sugar deficit and the government was expected to import sugar to meet demand.

“Imported sugar has always been cheaper but with the increase in global prices and the high demand in the country where we’re already experiencing a deficit, then the price is expected to increase,” he said. Kenya issued 40 permits to importers mainly from Comesa.