Kenya sugar output to rise 19 pct in 2018 on good rainfall


Kenya expects its sugar production to jump by up to 19 percent this year, recovering from a drought-induced drop the previous year, a senior government official said on Thursday.

The East African nation has an annual sugar consumption of 870,000 tonnes but production has slumped due to a high cost of production, old and inefficient sugar crushing machinery as well as mismanagement and theft of farmers’ funds.
It relies on duty-free imports from the Common Market for Eastern and Southern Africa (COMESA) trade bloc to cover its annual deficits.

Solomon Odera, the head of the Sugar Directorate which falls under the agriculture ministry, told Reuters in an interview this year’s output would jump to 420,000-450,000 tonnes.

Production was 377,126 tonnes of sugar last year, a 41 percent drop from 638,340 tonnes a year earlier, hurt by a severe drought in the first quarter.
“We have had quite a bit of rain, and many of our particularly private companies are experiencing rather high efficiencies right now so they are able to mill all the cane that is available,” Odera said.

The drop in production in 2017 was also attributed to factories crushing immature cane and a slowdown in activity at Mumias Sugar Company, one of the biggest producers, he said.

Production at Mumias, which has been beset by management woes in the last several years, has slumped from its peak of more than 250,000 tonnes a year.
In its last financial year to the end of June 2017, Mumias Sugar’s output fell to 15,891 tonnes from 75,073 tonnes a year earlier, and the miller attributed this to cane shortage and a shutdown of its plant for maintenance.

Two groups of investors had expressed interest in setting up new factories: one with a capacity to crush 2,500 tonnes of cane per day, and another whose capacity will eventually go up to 7,000 tonnes per day, but these were in initial stages, Odera said.

Other existing sugar companies are also planning expansion.
Privately-owned Kwale International Sugar Company Limited said its output for 2018 would rise to about 50,000 tonnes from 35,000 tonnes last year.

It said it planned to boost the milling capacity of its factory to 5,000 tonnes of cane per day from 3,500 tonnes per day at present in the next two to three years.

Kwale International is owned by Pabari Investments Limited and Mauritius’s Omnicane, which has a 20 percent stake. World raw sugar prices are at 2-1/2 year lows due to a glut.

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