This archive report was first published on 13 January 2020.
January 13, 2020, marked a challenging period for the sugar industry in Kenya, as sales plummeted by Sh1 billion compared to the previous year.
According to the Sugar Directorate, the income from cane in 2019 dropped to Sh19.6 billion from Sh20.6 billion in the previous season, largely due to a shortage of raw material.
The cane availability dropped from 5.5 million tonnes to 5.3 million tonnes in the review period, resulting from a decline in production.
"With a combined milling capacity of 43,500 tonnes per day, the country has the potential to process over 1.2 million tonnes of sugar, enough for local consumption and surplus for export. However, this has remained elusive due to inadequate raw material supply as well as inefficient factory operations," says the regulator.
As a result, about five factories have remained shut for some time, grappling with the shortage of raw material and operational challenges.
The directorate noted that the combined factory rated capacity of 43,500 tonnes of cane per day requires in excess of 12 million tonnes of cane compared to the current production.
During the period under review, the cane price was Sh3,700 per metric tonne, with some millers offering premium prices to growers of Sh3,800-Sh3,900 for the same quantity, in order to lure growers in the wake of a shortage.
Cane delivery to the factories dropped 12 percent in the year to October 2019 compared to the corresponding period.
According to data from the Kenya National Bureau of Statistics, cane delivered to factories in the review period stood at 3.8 million tonnes against 4.3 million tonnes realised in the same period last year.
Kenya is now banking on irrigation to bridge the increasing shortage of sugar in the market and enhance cane availability to cover for the deficit.
"Irrigation has the potential to double or triple sugar cane yields. Currently, it is practised in Kwale on a surface of about 1,736.46 hectares. Strategies will be put in place to expand the area under irrigated cane production," said the directorate.
