This archive report was first published on 3 July 2020.
On July 2, 2020, Agriculture Cabinet Secretary Peter Munya announced a raft of reforms aimed at streamlining the sugar sector, which has been performing dismally for long.
The reforms include leasing of State-owned sugar mills to private investors for a period of 20 years to process and develop cane on farms owned by these millers.
Kenya has banned sugar imports with immediate effect, citing a sugar glut that could lead to the collapse of the industry. The imports had rendered Kenyan mills uncompetitive, with ex-factory prices for the mills remaining at Sh85,260 for a tonne compared with the CIF price of Sh60,117 for the same quantity.
The ban on sugar imports is likely to result in a high cost of the commodity in the market, as the cheap imports normally check on the high cost of the sweetener locally.
According to the Sugar Directorate, imports of the commodity between January and May stood at 207,814 tonnes against 172,213 tonnes in the same period last year, a 21 percent increase.
Mr. Munya said the long leases of State-owned firms will help increase farmers’ income and improve competitiveness and service delivery in the sugar sector.
“Through comprehensive reforms, the government is determined to facilitate a multi-purpose sugar cane industry that is efficient, diversified and globally competitive,” said Mr. Munya.
The announcement comes just weeks after leaders from the western sugar belt raised concern that high imports had rendered local factories untenable, in turn impacting negatively on farmers.
