The factory price of sugar has dropped 27 per cent in the last two months as high volumes of imports helped to cool the high cost of the commodity, triggering further declined in consumer prices.
Data from the Sugar Directorate indicates a 50-kilogramme bag of sugar is currently selling at Sh4,000 at the factory gate, down from Sh5,500 in August.
Data from the Sugar Directorate indicates a 50-kilogramme bag of sugar is currently selling at Sh4,000 at the factory gate, down from Sh5,500 in August.
The retail price of sugar has subsequently dropped from a high of Sh400 for a two-kilogramme packet in March to Sh250.
The regulator attributes the decline to increased imports and growth in local production after a number of factories that had been shut for regular maintenance resumed operations this week.
“There have been a drop in prices in the last two months following increased supply of sugar in the market,” said Alfred Busolo, director-general Agriculture Food Authority.
Mr Busolo said local production has at the same time improved from a low of 3,000 metric tonnes in August. Some 6,000 metric tonnes had in September and early October been milled with the official pointing out that consumers are likely to witness lower prices in the coming days.
Traders and millers imported 300,000 metric tonnes of the commodity in August alone ahead of the August 31 expiry of the duty-free window for importing sugar largely from Brazil.
According to statistics from the directorate, sugar imports between January and July amounted to 245,168 metric tonnes.
Kenya produces about 600,000 metric tonnes of sugar a year, compared with annual consumption of 870,000 tonnes. The sugar deficit is usually covered by stringently controlled duty-free imports from the Common Market for Eastern and Southern Africa trade bloc.
The Treasury scrapped duty on imported sugar from outside the free trade bloc in May.
But further imports are expected in the coming months following the move by the Treasury last week to extend a duty waiver to millers.
A special gazette by Treasury secretary Henry Rotich extended the window to December 31.
Sugar shortage was caused by drought in major cane-growing zones that affected the crop in the field, with the directorate estimating a shortage of 1.9 million metric tonnes at the end of last financial year.
Improved short rains are projected to improve sugar cane production in key growing areas and support operations of factories.