This archive report was first published on 3 July 2020.
Kenya's sugar industry has been struggling for years, with local factories unable to compete with cheap imports. However, a recent announcement by Agriculture Cabinet Secretary Peter Munya has brought hope to the sector.
On Thursday, CS Munya announced the suspension of trading licences and pre-shipment approvals for sugar imports, effective immediately. This move aims to curb the influx of cheap sweetener in the domestic market, which has negatively impacted local farmers.
"We have also suspended pre-shipment approvals and extension of all sugar import permits until further notice," said CS Munya.
The uncoordinated importation of brown sugar has rendered Kenya's mills uncompetitive, with ex-factory prices remaining at Sh85,260 for a tonne compared to the CIF price of Sh60,117 for the same quantity.
With this move, sugar prices are expected to increase, as the cheap imports normally check on the high cost of the sweetener locally. Kenya is allowed to import 350,000 tonnes from the Common Market for Eastern and Southern Africa (Comesa) to fill the local deficit.
As part of the reforms, the state will lease State-owned sugar mills to private investors for a period of 20 years to process and develop cane on farms owned by these millers, including Chemelil, Muhoroni, Sony, Miwani, and Nzoia.
