Kenya to increase sugar imports to meet local demand
Sugar production in Kenya is expected to fall by 4% to 660,000 MT in marketing year 2022/23, due to lower sugar cane yields caused by higher fertilizer prices, which is expected to limit fertilizer application. Despite an increase in harvested area, which is expected to increase by 3% from 209,000 to 215,000 hectares due to new plantings in Transnzoia and Narok counties, production will fall.
Sugar has become a more attractive option than corn for many farmers in these regions due to lower labor requirements and guaranteed farm gate prices and sales through factory contracts.
According to a report by GAIN, USAID notes that private mills, which account for nearly 80% of the country’s total sugar production, are expanding into areas previously reserved for public operations.
In the long term, this will almost certainly increase Kenya’s sugarcane yields and processing efficiency. According to Kenya’s Sugar Research Institute (SRI), new private sector-supported sugarcane plantations can produce up to 140 MT/HA of cane, compared to 90 MT/HA in traditional areas served by public mills.
This yield disparity is largely due to better harvesting practices and lower transport losses on farms contracted to private sector mills.
Also, private sector factories tend to provide more robust extension services than public sector factories. Additionally, they convert cane to sugar more efficiently, with an average cane-to-cane ratio of 10:1 compared to 18:1 in public mills.
Despite a decline in domestic sugar production, consumption is expected to increase by 5% to 1.15 million metric tons as consumers return to the restaurant and hospitality sectors after the lifting of COVID-related restrictions -19.
To meet the increased demand, the East African country plans to import 500,000 MT of sugar, compared to 375,000 MT purchased in the previous corresponding period. With the exception of Saudi Arabia, the majority of Kenya’s imports come from the Common Market for Eastern and Southern Africa (COMESA) countries.
The Sugar Directorate of the Kenya Agriculture and Food Authority has set an annual limit of 180,000 metric tons for imports of raw sugar from all countries in 2022. Issuance of import permits makes respect this limit. Once the limit is reached, no further import permits are issued under this policy.
Imported raw and refined sugar is subject to a 100 percent customs duty. Raw and refined sugar from COMESA countries, on the other hand, can enter Kenya duty-free up to an annual safeguard quota of 350,000 MT. Imports from COMESA countries that exceed this quota are subject to the standard import duty of 100%.
In addition, Kenya allows entry of refined sugar from any source with a 10% tariff reduction if used in the domestic manufacture of products for export. Although Kenya does not export much sugar, this policy encourages the export of goods containing sugar as a raw ingredient.
First published: June 22, 2022, 08:59 IST