Sugar prices in Kenya’s retail markets have shot up over the past few weeks, causing a deep hole in the pockets of many households even as the salaried await further tax obligations following the coming into effect of the Finance Act 2023. A spot check reveals that a kilogram now retails at an average of KSh 250 from KSh 210 in the month of July while a 2kg pack has risen from KSh 420 to KSh 500 in most retail outlets.
Prices of this household item have hiked on the retail shelves at a time when most milling firms in the country remain shut due to cane shortage, this situation opened up a window for licensed importers as well as unscrupulous merchants to make abnormal profits.
The steep prices on the retail shelves of the sweetener come after the Food and Agriculture Authority requested all millers in Western Kenya to shut down after they were found to be crashing pre-mature cane.
At the moment, only millers within the Southern Sugar belt are in operation. Millers within Western Sugar belt shut down in the middle of July 2023 until September 2023 as directed by the Sugar Directorate, to allow for cane to mature.
Available data indicates that Kenya has 14 milling factories with a national demand standing at 1.01 million metric tonnes against local production of 490,704 metric tonnes, leaving an annual deficit of 521,695 metric tonnes. Kenya has a milling capacity of 14.96 million metric tonnes (41,000 Tonnes of cane per day).
Sugar production capacity for Kenya
At the moment, the current production is 4.75 million metric tonnes, which is 48% of the milling capacity while the country needs to process 9.8 million metric tonnes of cane that can produce 1.09 metric tonnes of the product.
The sugar sector in Kenya supports up to 8 million Kenyans and 400,000 small-scale farmers who produce more than 90% of the cane required by the milling plants in the country.
According to figures from the sugar directorate a 50 kg bag of sugar was fetching a wholesale price of KSh 6,844 in December 2022, translating to KSh 137 per kilo (wholesale rate) and KSh 155 per kilo-retail rate. In May 2023, this has risen to KSh 9,252 per 50 kg bag (wholesale, KSh 185 per kg(wholesale), and KSh 211 per kg retail.