Fast maturing cane sure to help farmers meet demand

Tractors delivering cane to a crushing miller machine at Butali Sugar Mills in Kakamega. Photo/ISAAC WALE

What you need to know:

  • Persistent cane shortages, government bureaucracy and poor infrastructure have long frustrated efforts by millers.
  • It had been hoped that the privatisation of three government-owned millers in Kisumu would help bridge the deficit.
  • But that has not happened, just months before the expiry of Comesa protection.

Kisumu sugar millers and farmers face a bleak future unless they diversify and invest in fast maturing cane.


The county has the highest number of sugar factories in the country but to many stakeholders, the sweetener has left nothing but a bitter taste in the mouth.


Persistent cane shortages, government bureaucracy and poor infrastructure have long frustrated efforts by millers and farmers to reap the maximum benefits out of their sweat.


The County hosts the privately owned Kibos Sugar and Allied Industries Limited (KASIL), Miwani and Muhoroni which are both under receivership and Chemelil.

A consortium of local and South African-based investors has sought the go-ahead to set up another Sh11 billion factory on the outskirts of the lakeside town.

However, its construction has been hit by a dispute over the ownership of land on which it is to stand. Despite the high number of factories, the tea cup is tasteless because of the persistent sugar shortages in the country.


According to Kenya Sugar Board, in 2010 sugar output dipped by 4.5 percent to 523,522 tonnes due to whether-induced cane shortages in some zones, but is expected to rebound by six percent this year.


It had been hoped that the privatisation of three government-owned millers in Kisumu would help bridge the deficit and raise additional revenue through diversification to other sugarcane related products such as electricity, ethanol and paper.


But that has not happened, just months before the expiry of Comesa protection.

Wholesale and retail prices of sugar in the local market since the launch of the Comesa Free Trade Area (FTA), and during the period of the safeguard, as compared to the price of imported sugar, show that the consumer is the loser.


Of the 19 Comesa member-countries, 14 signed the FTA agreement. Under it, Kenya sought a partial exemption from the “no tariffs on goods from member states” rule for its sugar sector.


At the end of the safeguard, local millers will have to face the onslaught of duty-free sugar from other producers in the trading bloc, which may turn out to be cheaper because they enjoy lower costs of production accrued from economies of scale and diversification.


In a botched sale attempt in 2007, investors in Sudan and India had expressed interest in the factories.

The bidding process closed with Sudan’s Kenana Sugar Company as the winner for Miwani while a consortium led by India Sugar and General Engineering Corporation were declared winners for Muhoroni.


Treasury cancelled the bids under unclear circumstances though insiders said it opted to look for strategic investors rather than do a wholesome sale.


A Kibos Sugar Factory senior manager, Mr Vitalis Ogola, said last year the sugar factories could not withstand the onslaught from the Comesa region, arguing that the local millers had not diversified enough to stop relying on sugar as the core industry product.


“Our factories have not been performing well and the reforms in the sector which were a condition for the extension of the safeguards have not taken place”. Among the issues are the aging machines.