Sugar cane sales down by Sh1bn as shortage bites

Sugar cane sales dropped by Sh1 billion in 2019 compared with the previous year as factories struggled with limited supply of raw material.

According to Sugar Directorate, income from cane in 2019 dropped to Sh19.6 billion from Sh20.6 billion in the previous season, occasioned by shortages.

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 a day, the country has 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.

About five factories have remained shut for some time as they grapple with the shortage of raw material and operational challenges.

The directorate said combined factory rated capacity of 43,500 tonnes of cane per day requires in excess of 12 million tonnes of cane compared with the current production.

The cane price during the period under review 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 in comparison with corresponding period.

Data from the Kenya National Bureau of Statistics indicated that 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.

Sugar production declined by 10 percent in October last year compared with the previous period following poor performance in most of the factories coupled with a serious shortage of raw material.

Kenya is now banking on irrigation to bridge an increasing shortage of sugar in the market and enhance cane availability to cover for the deficit.

“Irrigation has potential to double or triple sugar cane yields. Currently it is practised in Kwale on a surface of about 1,736.46. Strategies will be put in place to expand area under irrigated cane production,” said the directorate.