Treasury opens duty free sugar import window
The National Treasury has opened a three month duty free window for the importation of sugar into the country.
In a special gazette notice dated October 4, the treasury announced duty free importation of sugar until December 31, to plug the country’s sugar deficit.
The importation window will however only be open to sugar millers and not businessmen, with private millers expected to flex their financial muscle, growing sales faster than struggling state owned millers.
“Duty shall not be payable to sugar which will be loaded onto vessels between 1st September 2017 and 31st December 2017, destined to a port in Kenya and consigned to a local sugar miller,” Treasury Cabinet Secretary Henry Rotich said in the notice.
The waiver of duty is seen as response to the acute drought at the start of the year that affected sugarcane production.
The Agriculture and Food Authority (AFA) had waived duty on sugar imports until August 31 as sugar millers continued to struggle with low cane supply that saw sugar prices cross the Sh200 per kilogram mark.
Kenya consumes 870,000 tons of sugar against a production of 600,000 tons per year.
The deficit is met with sugar importation mainly from the COMESA region under strict quotas, as part of a plan to protect local sugar millers.
Sugar importation in Kenya however has been riddled with suspicion with industry players blaming it on the slow growth of the sugar sector.
Between January and July an estimated 245,168 tons of sugar was imported into the country, indicating the dependence of local consumption on the imported sweetener.
In May AFA indicated the country was set to import an additional 150,000 tons of sugar to cover the deficit due to drought.
This is expected to be the highest level of sugar imported into the country, putting local millers at odds from competition from cheap imports.
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