Consumers pay dearly for sugar despite decline in factory price
What you need to know:
- The Sugar Directorate has pointed an accusing finger at distributors saying they are either selling at higher prices to wholesalers or hoarding the commodity to create a shortage.
- Despite an increase in volume, some retailers are not getting enough stocks with some branches of major supermarkets are running out of the commodity.
The consumer is still grappling with the high cost of sugar even as the factory price has declined by about Sh700 per 50kg bag.
The retail price of the sweetener has soared to an average of Sh135 per kilogramme despite a drop in factory prices from a high of Sh5,800 per 50kg bag two weeks ago to Sh5,100 last week.
Solomon Odera, head of the Sugar Directorate, has pointed an accusing finger at distributors saying they are either selling at higher prices to wholesalers or hoarding the commodity to create a shortage.
“Yes, the retail prices are still high though we expect them to have dropped in line with the falling factory prices,” said Mr Odera.
Nearly all millers are selling a 50 kilogramme bag at between Sh5,100 and 5,250, with an exception of South Nyanza factory which is selling the same quantity at Sh5,600.
Imports, meant to check rising shelf prices, stood at 24,374 tonnes as at the end of last month — an increase from 9,000 tonnes in August.
A stocks report from the Sugar Directorate indicates that the volume of local sugar grew to 7,700 tonnes last week from a low of 3,000 tonnes two weeks ago.
Despite the increase in volume, some retailers are not getting enough stocks with some branches of major supermarkets running out of the commodity.
The regulator believes there is a problem with the distribution network given that millers are releasing to the market all the sugar they process.
The directorate has written to millers requesting details of their distributors to monitor the quantities that they are holding.
The regulator said the move will enable it to diagnose any supply challenges within the distribution network as well as plan for imports based on local needs.
The directorate has no power to control activities of distributors who at times end up hoarding the commodity to create artificial shortages which spark price rallies.
Last week the directorate issued a directive to millers to allow farmers to buy sugar.
“As a solution to the distributor problem and lack of regulations to check hoarding and inflating prices, I have directed millers to open up their distribution channels,” said Alfred Busolo, the director general of the Food and Agriculture Authority.
