14pc sugar factory price jump signals higher retail cost

Sunday March 26 2017

A shopper at a supermarket sugar section. FILE PHOTO | NMG

A shopper at a supermarket sugar section. FILE PHOTO | NMG 

More by this Author

Dwindling cane supply has pushed up sugar factory price by 13.5 per cent, marking the first significant rise since the beginning of the year.

A 50 kilogramme bag is on average selling Sh5,900 from Sh5,200 last month, a move that is already impacting on consumer prices with some brands such as Mumias retailing at Sh297 from Sh290 last month.

South Nyanza (SONY) sugar is currently milling an average 1,500 tonnes a day down from normal operations level of 2,500 tonnes.

The firm’s managing director, Jane Odhiambo, said: “Factories do not have enough stocks at the moment as a result of the cane deficit in major growing zones. This has pushed up the price of the commodity in the market.”

She said SONY currently sells everything produced as demand outstrips supply.

By the time of going to press, the factory had only 200 tonnes inventory, which had already been paid for.

Lack of enough cane to mill has seen the miller cut production from seven days a week to five days.

The Sugar Directorate has also attributed the significant price rise to the increase in demand at the factories.

“There has been an increase in demand at the factories—that is why the factory prices have gone up of late,” said Solomon Odera, head of the directorate.

The directorate estimates there is a deficit of 1.9 million tonnes of cane.

The current stocks of sugar held by millers average 7,000 tonnes, according to the government with millers operating under capacity.

Nzoia Sugar Company is currently milling at less than 2,000 tonnes of cane per day against installed capacity of 3,000 tonnes.