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Duty-free sugar imports fail to tame high retail prices after four months


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Duty-free sugar imports fail to tame high retail prices after four months


A tractor ferrying sugarcane from sugarcane plantations. FILE PHOTO | BENSON MOMANYI | NMG

Duty-free sugar imports have failed to cool off high retail prices of the commodity despite being shipped into the country since January when the window was first opened.

Data from the Sugar Directorate indicates that the volumes imported between January and March this year were 93,000 tonnes against 46,000 in a similar period last year.

Read: Cheap sugar imports from India, Madagascar cool prices

The sharp increase in import volumes was on the back of the waiver on duty to allow the shipping of cheap commodities to address a shortage that has kept prices high.

The directorate says the average price of sugar is Sh157 a kilogramme, up from Sh150 in January, citing the rising cost of a shortage locally.

On supermarket shelves, a two-kilo packet of sugar is now retailing above Sh300 on average, from Sh289 in February.

Duty-free import of sugar is part of a wider government scheme to lower the high cost of goods and help households to cope with the rising cost of basic commodities.

Locally, production has been inhibited by diminishing cane supply on the farms on the back of poor rains in the previous seasons.

The shortage of cane has seen millers grapple with the little available, pushing the price of a tonne of the commodity from Sh4,584, which is the recommended price by the sugar directorate, to Sh5,250.

The diminishing supply of cane to factories, which has cut down on production activities, saw the total sugar bagged in the review period decline by 26 percent to 49,761 tonnes.

The decline in production will compel consumers to pay more for the commodity on the back of limited availability in the market.

Outside Comesa

The first two vessels with more than 42,000 tonnes of sugar docked in February to ease the pain of the decline in production by local millers.

Read: Duty-free sugar imports dock at port of Mombasa

The government opened an import window in December that would see traders ship in 100,000 tonnes of sugar outside of the Common Market for Eastern and Southern Africa region to curb an imminent shortage in the country that had pushed up the cost of the sweetener to Sh312 for a two-kilo packet.

The State has also allowed the Kenya National Trading Corporation to import a further 200,000 tonnes duty-free.

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