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After the crackdown on smuggled sugar, the government must now focus on modernizing local production of the commodity to meet market demand. Reports from across the country indicate that there is a sugar shortage that is driving up prices. Already, the retail price of a two-kilogram package has risen to Sh275, against Sh200 last month, a trend that may worsen if drastic measures are not taken to protect consumers.
But it was inevitable was an artificial market stabilized by illegal and dangerous stocks of sugar. Now the lid has been opened and the truth unveiled and we have to face the reality. We need to go back to the basics and look at the whole issue of the sugar trade.
An badysis of the sugar trade presents a scary scenario. Production has steadily declined over the past three decades due to bad policies, mismanagement and, as recent evidence has shown, handling by unscrupulous traders important cheap and bad products quality.
with the private majority. However, the factories run by the state are in terrible condition. They operate obsolete equipment and are poorly managed and extremely indebted.
Some of the plants, including Chemelil and Muhoroni, are running out of money and faltering on the verge of collapse. Miwani went under it years ago and efforts to revive it failed. Mumias, Nzoia and Sony barely survive. Cane growers owe millions of shillings and many jobs were lost.
Although relatively successful in terms of production, private factories have been accused of unfair practices such as poaching and price undercutting. Things are aggravated by the fact that, for all millers, the unit cost of production is much higher than the regional average. The available statistics show that the unit cost of producing one ton of sugar in Kenya is twice as high as that of the other Comesa countries, which makes ours uncompetitive.
Even in the best of cases, the country can not produce. The average annual production stands at 600 000 tons against a consumption of 800 000 tons, filled by imports and where the preferred source should be Comesa
The entry of contraband sugar is both a cause and consequence of the failure of local sugar production. As the authorities intensify the fight against sugar barons, the essential task is to revitalize and rationalize local sugar production and ensure sustainability.
More importantly, we need the political will and firm commitment of the government to restore the local sugar industry.
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