In the face of already challenging economic conditions, the price of sugar stands out like a sore thumb and is forcing consumers to further tighten their budgets.
In its latest assessment of the cost of living, the Kenya National Bureau of Statistics indicates that sugar posted the highest year-on-year increase in May (between May 2022 and May 2023), rising by 49.2 percent to average Sh149.3 per kilogramme.
In the 30 days ending May 31, 2023, the average price of sugar has risen by a staggering 22.1 percent.
The price of sugar is on a run-away spree barely two months after the lapsing of a duty-free import window.
On December 22, 2022, National Treasury Cabinet Secretary, Prof Njuguna Ndung’u, gazetted duty-free importation of 100,000 metric tonnes of sugar, a move that was aimed at staving off price spikes.
Price spikes in sugar are the result of challenges in meeting the existing demand with available data showing the quantity of sugar milled in the country is on a general decline.
“Total sugarcane milled by all sugar factories dropped to 405,389 metric tonnes in April 2023, down from 546,150 metric tonnes in March 2023 and 716,274 metric tonnes in February 2023. Sugar made therefore also decreased to 32,729 metric tonnes from 49,372 metric tonnes in March. Total sugar produced (bagged) in April 2023 was 31,970 metric tonnes, a 36 per cent decrease from the previous month’s total of 49,761 metric tonnes”, says the Sugar Directorate.
Kenya’s annual sugar production has been posting a general slowdown in the recent past.
Domestic production
In 2022, Kenya’s domestic production stood at 8,707,800 tonnes, growing by 11.9 percent compared to 2021.
This growth was slower than the 14.3 per cent growth registered between 2021 and 2020 and much slower than the 47.9 percent growth registered between 2020 and 2019.
The average yield per hectare closed 2022 at 62.9 tonnes, down from 72 tonnes in 2021.
On Wednesday during his last monetary policy committee briefing, outgoing Central Bank of Kenya Governor, Dr Patrick Njoroge, decried the fact that the apex bank is unable to tame the price through the use of monetary policy.
“Inflation has been coming down but the real spanner in the works was sugar. You cannot control the price using monetary policy. Only the second-round effects will do that. At the same time, we have food prices coming down quite sharply”, Dr Patrick Njoroge said in his last briefing.
