By GERALD ANDAE-BUSINESS DAILY
An acute shortage of sugar has hit Kenya, leaving retail shelves empty and driving the commodity’s prices to a historic high.
In Nairobi, the severity of the shortage was marked by the fact that only one of the Tuskys supermarket branches in the city centre had sugar that had been delivered at 2pm. Other retailers, including Uchumi and Nakumatt did not have a single packet of sugar on the shelves.
Head of Sugar Directorate Solomon Odera said 8,000 tonnes of sugar were imported between Monday and yesterday and are currently being distributed countrywide to ease the shortage.
“Some imports have arrived and are currently with the distributors. We expect it to get on the shelves by Friday or Saturday this week,” Mr Odera told the Business Daily.
An additional 5,000 tonnes is expected to arrive on Saturday with the possibility of bringing retail prices that touched the Sh400 per two kilogramme packets.
Kenya produces 600,000 tonnes of sugar annually and relies on imports to meet the excess demand that currently stands at 300,000.
Importers are allowed to ship in 300,000 tonnes of duty free sugar every year from Common Market for Eastern and Southern African (Comesa) states.
The directorate is projecting a shortage of 1.9 million tonnes of cane by the end of this financial year, which should farther put pressure on supply of the commodity in the market.
The current shortage has been blamed on drought, which affected sugar growing zones following a prolonged dry spell since last November.
Sugar production dropped by 16 per cent in February compared with the same period last year as cane shortage took a toll on the quantities produced.
Production declined from 126,362 tonnes registered last year in February to 104,907 tonnes in the corresponding period this year.
The shortage has seen Kenya enhance sugar imports as the regulator moves in to tame the current high prices that have hit a new high.
Kenya imports between 8,000 and 15,000 tonnes every month but the directorate has increased that to 100,000 tonnes within the next two and a half months to deal with the shortage.
The shortage has also been blamed on the recent closure of Mumias and Transmara factories that are currently undergoing maintenance.
Transmara plays a major role in Kenya’s sugar output, producing about 250 tonnes every day, while Mumias
has been producing approximately 80 tonnes per day despite having the largest processing capacity. Mumias has a daily installed capacity of 840 against Transmara’s 300.
Mumias’s recovery journey to profitability has been weighed down by losses and debts.
Current liabilities for the firm stood at Sh21 billion as at December 31, 2016, a situation that was worsened by the Sh2.9 billion loss that it registered in the same period.
The troubled miller says that it foresees profit falling by 25 per cent for the year ending June 2017, which will be more than the loss reported for the same period in 2016.