Millers shutdown raises sugar prices

Sugar prices in several parts of western Kenya have gone up after two millers in the region shut down for maintenance.

The situation has sparked fears of a shortage of the commodity in the market.

Some distributors are suspected of hoarding sugar, creating an artificial shortage.

Mumias Sugar Company, which produces 60 per cent of the country’s sweetener, stopped production last week.

The miller has a crushing capacity of 8,000 tonnes per day and is expected to resume operations in the next 45 days.

The privately run West Kenya Sugar Company is also undergoing maintenance.

The firm’s management has indicated that they were likely to resume normal crushing by mid-November. The miller has a daily crushing capacity of 3,500 tonnes.

A survey by the Nation showed that the price of a 50-kilogramme bag of sugar has increased from Sh4,200 to Sh5,200 in the last one week in the region.

The retail price of a kilogramme of sugar has gone up from Sh90 to Sh110.

HOARDING
A kilogramme of branded Mumias sugar is selling at Sh120 in supermarkets, up from Sh110.

The shortage has been attributed to the hoarding of the commodity by some distributors, hence the raised prices.

A senior manager at Mumias Sugar Company, who requested anonymity, said the miller had no stocks in its warehouses. He said the problem was partly due to failure by the miller to operate at full capacity.

“We are anticipating a shortage of Mumias sugar since we have not been operating at full capacity. The situation is likely to get out of hand after we shut down for the annual maintenance,” said the manager.

West Kenya Sugar managing director Tejveer Rai did not respond to calls by the Nation but a manager at the firm said there was no sugar in their warehouses.

The manager said they had not been milling since October 1.

FESTIVE SEASON
Supermarket owners have reported panic buying of the commodity as the shortage threatens to spill over into the December festive period.

A manager at Mama Watoto Supermarket, Mr Peter Wawire, said their sugar stock was fast running out and they were unlikely to replenish it after distributors pushed up prices.

He said the supermarket sold 300 bags of sugar weekly and had placed an order for 2,400 bags to last the next two months.

“But to our shock, the price of a 50-kilogramme bag has gone up to Sh5,500, and the distributor is insisting that we have to pay the new price if we are to get our supply,” said Mr Wawire.

A distributor, who requested not to be named to protect his business interest, said some of his colleagues had taken advantage of the situation to make quick profits.

He said one of his colleagues had stockpiled 10,000 bags of sugar in a warehouse in Nairobi and selling a 50-kilogramme bag at Sh6,000, up from Sh3,200.

At Yako Supermarket, a kilogramme of branded Mumias sugar was selling at Sh120 and a 2kg packet was going for Sh240.

The western Kenya regional manager of the Sugar Directorate, Mr Laban Mulei, said the anticipated shortage had pushed up prices.

A number of millers in western Kenya have in recent months expressed concern over huge tonnes of unsold sugar.

The situation, according to the companies, was as a result of the uncontrolled entry of illegal sugar into the country.