Kenya sugar shortage to continue

July 8, 2009

, NAIROBI, Kenya, July 8 – The Ministry of Agriculture projects the current sugar shortage plaguing the country to continue for a while longer.

Addressing journalists from Kilimo House on Tuesday, Agriculture Assistant Minister Kareke Mbiuki said a pending court case was hampering the ministry from importing any sugar from the Common Market for Eastern and Southern Africa (COMESA) region.

In an effort of shielding his ministry from fault, Mr Mbiuki blamed the current shortage on some senior Treasury officials whom he alleged were working with rogue sugar traders.

“I strongly believe that a notorious sugar cartel is colluding with officials at Treasury blocking the importation of sugar into the country,” said the Assistant Minister.

He added that his ministry had petitioned the Ministry of Finance to import 40,000 metric tonnes of sugar from non COMESA countries but had not gone through.

“At this point the only way out of the current problems is by importing but you find that this is not forthcoming because of the issues the Kenya Sugar Board still has in court.”

The ministry had, in 2008, gazetted import regulations that allowed for more traders to import sugar. However some sugar sector players moved to court seeking to block the regulations.

The sugar situation is further compounded by the fact that major sugar factories are set to shut down for regular maintenance.

Mumias Sugar Factory which accounts for 60 percent of national sugar output is set to close later this month with other factories slated to do the same.

Kenya has a sugar demand of 750,000 metric tonnes but only produces 520,000 metric tonnes creating a huge deficit that needs to be met through importation.

Sugar traders are also said to be hoarding their sugar in anticipation of the sugar price going up.

The Assistant Minister highlighted most of the state owned sugar factories were operating on debt and said that the ministry was in the process of privatising some of them to improve efficiency.

“Most of our sugar factories are not functional, they are highly inefficient.  We want to ensure we have two or three major factories in the cane region,” said Mr Mbiuki.

The total debt in the sugar industry is projected to be over Sh54 billon.

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