•AFA has also advised that sugar importation from COMESA be halted at the moment though the local prices are not attractive for imports.
•Exports on the excess can also be considered, it said.
Image: FAITH MATETE
The Agriculture and Food Authority (AFA) is advocating for reduced sugar production by millers in the country and cut on imports to save farmers from drop in earnings.
This is in the wake of improved output which has led to a significant drop in ex-factory prices, with millers offering lower margins for canes.
An industry report by AFA indicates there has been a significant improvement on sugar production to a record high of 84,000 metric tonnes, exceeding the countries consumption by 4,000 metric tonnes.
The total sugar consumption in the country is 1.1 million metric tonnes of which, 950,000 tonnes is for table sugar translating into a monthly average of 80,000 metric tonnes of sugar.
The increase has resulted in a significant drop on sugar prices to a low of Sh5,128 per 50 kg bag, down from Sh9,500 at a similar time last year, AFA has noted.
Sugar prices have been on a general decline since the resumption of milling by all sugar factories in December 2023. This is attributed to improved sugar availability in the market, which informed the drop in ex-factory sugar prices.
This has however come with a drop in cane prices which have gone down from a high of Sh6,050 per tonne to Sh4,950 currently, hitting farmer’s earnings.
“Going forward, the millers are encouraged to reduce their production by 10 per cent to allow the stocks to reduce hence increase in prices which will translate into increase in the price for cane,” AFA said.
All the sugar mills are currently in production and operating in the regions where the factories are domiciled, the authority said.
There are 17 sugar factories with a total installed crushing capacity of 55,300 tonnes of cane per day.
At an operational efficiency of above 70 per cent, the factories are capable of producing over 1,500,000 tonnes of sugar per year.
The improved performance in the sector has been pegged on among others, last year’s decision to suspend crushing to allow improvement on cane availability and quality, after the industry started crushing pre-mature harvests.
Following the closure of mills in the Western and Nyando zones for a period of four months, there has been a marked improvement in the cane situation with the average harvesting age currently at 17 months, AFA now says, up from 12 months before the closure.
“The increase in production is a result of the order brought by the directorate on cane management, the increased rains but most importantly the intervention by the government to provide subsidized fertilizer to farmers have realised high yields almost 40 per cent of the previous production,” it said.
AFA has also advised on the removal of VAT on transport to increase the earnings by farmers.
The ex-factory price for the month of August is meant to be Sh4,590 per tonne based of the average ex factory price of sugar.
In absence of the cane pricing committee, the authority gave an advisory of a price of Sh4,950 per tonne, giving an additional Sh360 to protect the farmer in absence of which the farmer would have been paid less by the miller.
The millers wrote to the authority rejecting the price of Sh4,950 and proposing to pay between Sh4,300 and Sh4,600 per tonne.
A request was made for the extension of the Interim Cane Pricing Committee was done on July 1, 2024 but due to the changes at the Ministry, the same is pending.
AFA has also advised that sugar importation from COMESA be halted at the moment though the local prices are not attractive for imports.
Exports on the excess can also be considered, it said.