Declining production and outdated technology plague sugar industry

Struggling under the weight of huge debts, high production costs and outdated technology, performance of the sugar sector remains poor.

Latest figures from industry regulator Kenya Sugar Board (KSB) indicate that the country produced 376,973 tonnes of sugar in the nine months ended September last year, down 2.3 per cent from 385,709 tonnes in the same period previously. The dwindling fortunes of the sugar sector comes ahead of plans by the Government to sell off its shareholding in five sugar factories: Chemilil, Sony, Nzoia, Miwani and Muhoroni.

Parallel to this proposal is a plan by the Cabinet to write off debts and clean balance sheets of the five sugar factories before selling them.

With the clock ticking towards expiry of the Common Market for East and Southern Africa (Comesa) safeguards, which puts a limit on sugar imports into the country until 2012, there are fears that most factories may shut down due to competition from cheaper imports.

KSB cites weather and the closure of factories for maintenance for the decline in production, which fell by 19.2 per cent in the third quarter of last year.It said 44,473 tonnes of sugar were imported during the third quarter, up 90 per cent from 23,353 tonnes in the same period a year earlier.

So far last year, Swaziland, Egypt and South Africa have been the country’s main sugar suppliers. Critics say the sugar industry is plagued by high costs of production a tonne and a lack of credit for inputs, leading to low yields. This saddles Kenya with an annual sugar deficit of 200,000 tonnes. This deficit is bought mainly from the Comesa region, through an import window, which expires in the next three years.