In December, Kenya’s sugarcane industry experienced a remarkable surge, with the volume of sugarcane delivered to factories for milling doubling compared to the previous month. This surge, reaching 610,020 tonnes, marked a significant 105.9 percent increase from November’s 296,170 tonnes, according to data from the Kenya National Bureau of Statistics.
The surge in sugarcane supply coincided with the conclusion of a four-month ban on sugar production, which was implemented to curb the harvest of immature raw materials. The Agriculture and Food Authority (AFA) had enforced the ban in July, permitting only those factories that demonstrated adequate stocks of mature cane to crush during the ban period.
This precautionary measure became necessary due to the depletion of mature cane stocks in both public and private factories, leading to the crushing of immature cane. Moreover, fierce competition among factories, enticing farmers with better offers, exacerbated the situation, prompting the ban to be in effect from July to November.
During the ban period, cane deliveries witnessed a significant decline from 436,690 tonnes in June to a mere 182,970 tonnes in September, further aggravating the existing sugar deficit. To stabilize prices and meet consumer demand, the government extended duty-free importation of sugar, resulting in a temporary easing of prices from US$1.39 per kilogram in October to US$1.36 in December.
As farmers ramp up their sugarcane supply to factories, the government has initiated plans to revitalize the struggling sugar industry. In January, the government commenced the process of leasing five public sugar factories, including Nzoia Sugar Company, South Nyanza Sugar Company, Chemelil Sugar Company, Muhoroni Sugar Company, and Miwani Sugar Company, to private companies for a 20-year term as part of a fresh revival plan.
Jude Chesire, Director of the Sugar Directorate, addressed concerns raised over the limited duration by mentioning that the government would extend the timelines for investors to express interest in the planned leasing of the sugar mills. Representatives of cane farmers, led by Secretary General Richard Ogendo of the Kenya National Sugarcane Growers’ Association (KESGA), protested the proposed timelines as too short.
“The Government has given the new investors up to February 15 to submit expressions of interest (EOI) to run the firms. We feel this time is short,” expressed Ogendo.
Successful bidders will assume control over factories, office buildings, machinery, equipment, nucleus farms, staff and guest houses, schools, sports stadiums, and service contractor yards owned by the millers.
As Kenya seeks to breathe new life into its sugar industry, the surge in sugarcane supply signifies a promising step forward, coupled with strategic governmental interventions aimed at sustainable growth and stability within the sector.
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