Households feel the pinch as sugar prices hit four-year high
What you need to know:
- A kilo of sugar retailed at Sh125 last month, up from Sh120.74 in September and Sh110 in October last year following a shortage of the sweetener.
- The shortage has been attributed to poor performance of the factories and increased demand for the commodity.
Sugar prices have hit a four-year high of Sh125 a kilogramme following a shortage of the sweetener, pilling pressure on household budgets.
Data from the Kenya National Bureau of Statistics (KNBS) show a kilo of sugar retailed at Sh125 last month, up from Sh120.74 in September and Sh110 in October last year.
The shortage has been attributed to poor performance of the factories and increased demand for the commodity.
High sugar prices have becoming cyclic in the years preceding general elections. In 2011, just a year before the elections, a kilogramme of sugar retailed at Sh173—a price that is yet to be breached.
Millers expect sugar prices to remain high as the country moves towards the festive season during which consumption of the commodity spikes.
The high sugar prices are hurting household budgets already squeezed by high flour and petrol prices.
A two-kilogramme packet of maize flour has increased by more than Sh20 to an average Sh114 since the year started while the cost of diesel, which is mainly used to power trucks and buses, rose from Sh76.70 in January to Sh83.08.
These commodities have a direct bearing on inflation that rose from 6.34 per cent in September to 6.47 per cent last month—the highest level since February.
Consumer sugar prices have remained little changed since 2015 following stable supply of the commodity in the country.
The Sugar Directorate reckons that market forces of demand and supply are playing out at the moment, noting that high demand for the sweetener has sparked an increase in price.
Consumption of sugar in Kenya has been growing in recent years due to population growth and changing lifestyles.
Statistics from the Sugar Directorate indicate that consumption stood at 889,233 tonnes in 2015 from 860,084 tonnes the previous year.
The regulator has upped imports of the commodity to plug the deficit and curb the rally.
Kenya normally imports 15,000 tonnes of sugar from Common Market for Eastern and Southern Africa (Comesa) countries but it has increased this to 25,000.
The government says it will maintain the imports at the current level even though the stocks held by factories have increased to more than 8,000 tonnes from a low of 4,000 two months ago.
