Sugar prices to rise as global supply dips

Sugar consumers should brace for high prices in 2017 as global sugar production slumps.

According to the Agriculture and Food Authority (AFA) global producers sugar producers are facing supply challenges that have seen prices rise over the last three months.

AFA Director General Alfred Busolo said with Kenya already being a sugar deficient county, the government may be forced to import more in 2017 to meet demand.

While imports were expected to provide a cushion to local consumers, the price of a kilo of sugar has continued to rise.

“We expected that with the increase in imports that shelf prices would have gone down which hasn’t been the case. But it would have been worse without any imports coming in,” Mr Busolo said.

Kenya has so far this year imported 200,000metric tons of sugar in an effort of protecting the local sugar industry.

The country had been allocated a quota of 26,000 metric tons under the COMESA agreement.

The International Sugar Organization in August forecast a looming shortage for 2016/2017.

With local sugar millers experiencing cane shortage, prices are expected to rise sharply in 2017.

Already a kilo of sugar is retailing at between Sh135 and Sh145 shillings a kilo depending on the brand, up from an average of Sh110 shillings in August.

Mr Busolo said it was time sugar millers operated efficiently to ensure consumers are able to get affordable prices.

“We are just getting two or three days manufacture in a week and that is not good for production,” he said.

The price for a ton of sugar from COMESA has risen from Sh50,000 to Sh75,000 owing to the shortage.