- Sugar consumption in Kenya can be anticipated to extend by 3.2 per cent this yr pushed by tourism and bakery
- Following the expiration of the ban in November 2023, manufacturing is anticipated to rebound considerably in 2024/25
- The survey additionally says that the development in Kenya’s tourism sector will proceed to create demand for sugar.
Kenya is anticipated to report an increase in sugar imports, as the consequences of a ban on immature sugarcane processing kicks in, new findings have revealed. That is nonetheless anticipated to ease as millers ramp up their manufacturing
A report launched by Fitch Options Firm BMI and the USA Division of Agriculture exhibits that, the nation ought to count on manufacturing to lower by 32.9 per cent yr on yr in 2023/24 right down to 530,000 tonnes from 790,000 tonnes in 2022/23.
This has majorly been attributed to the ban on sugarcane harvesting that was applied in July 2023.
The ban, applied by the Kenyan Agriculture and Meals Authority in July, solely allowed factories to course of sugar cane if they might show that they’d mature sugarcane.
“Regardless of the sharp lower in manufacturing attributable to the ban, we count on consumption to extend in 2023/24, from 1.15million tonnes to 1.18million tonnes in 2024/25, with a pointy enhance in imports to make up for the home shortfall,” mentioned report reads.
The ban was applied as factories had been operating out of cane to crush, largely because of the below-average rainfall situations that affected Kenya between 2020 and 2023 in the course of the triple-dip La Niña.
Due to this, quite a few sugar mills started resorting to crushing immature cane.
Learn Additionally: Bittersweet: Sugar shortages in Tanzania result in a spike in costs
Sugar consumption in Kenya
Sugar manufacturing by Kenyan millers fell by 40 per cent in 2023 – a four-year low- attributable to sugarcane shortages that put strain on costs of the sweetener.
The whole sugar requirement within the nation is estimated at 1.1 million tonnes yearly, made up of 930,000 tonnes of desk sugar and 170,000 tonnes of industrial-use sugar.
The trade has the potential of manufacturing over 1.47 million tonnes of sugar which might meet the home demand and supply a sustained surplus for export to the Comesa area which is usually a web importing area.
Nonetheless based on the Agriculture ministry, attributable to trade inefficiencies, this capability is at the moment underutilized with sugar processing services solely round 56 %.
Reduction
Following the expiration of the ban in November 2023, BMI and USDA count on manufacturing to rebound considerably in 2024/25, rising by 37.7 % yr on yr as much as 730,000 tonne.
Consumption can be anticipated to extend by 3.2 per cent y-o-y, as much as 1.23million tonnes pushed by rising demand within the bakery and hospitality sectors.
Specifically, confectioneries and baked items had been recognized by Kenya’s 2023 Financial Survey as the 2 fastest-growing subsectors of the nation’s meals processing trade.
“We count on initiatives by the Kenyan authorities geared toward boosting the productiveness of the home sugar sector to proceed within the medium-to-long time period, whereas flagging various structural components weighing on this ambition,” reads the findings,” reads the survey.
The survey additionally says that the development in Kenya’s tourism sector will proceed to create demand for sugar.
With the manufacturing deficit in Kenya’s sugar sector, peaking in 2023/24 at 658,000 tonnes and narrowing to 496,000 tonnes in 2024/25.
[Food Business Africa]
The findings flag Kenya’s reliance on safeguard measures from the Frequent Marketplace for Japanese and Southern Africa (COMESA) to guard ‘Kenya’s inefficient sugar sector’.
“In November 2023, the federal government secured a seventh extension of those measures, however there’s a threat that future extensions might not be granted,” the report warns.
Moreover, it notes that because of the massive manufacturing deficit, decreasing dependence on imports would require substantial funding and time.
“Ending reliance on sugar imports stays a major problem that can necessitate long-term dedication and assets.”
Learn Additionally: Zimbabwe to introduce US$0.02 per gram levy on sugar contained in drinks
