By Kepher Otieno
Sugar millers are toying with the option of shutting down for at least three months as the current sugar shortage continues to bite. Muhoroni Sugar Company Managing Director Martin Owiti termed the closure as the only panacea to ease the crippling sugar shortage.
"Unless we agree and shut down our operations, we are likely to run short of sugar supplies," said Owiti. Muhoroni and Chemelil area director elect Nicholas Oricho succumbed to his reasoning saying they were starved of mature cane. "We want the millers to find a quick solution to ease the current sugar shortage," said Oricho.
Kenya Sugar Board acting chief executive Solomon Odera said there was nothing wrong with proposals of closure, arguing that the millers were at the moment operating below their installed capacity. Some were milling less than 1,000 tonnes of cane against their installed capacity of 3,000 tonnes. Again, most millers were operating on losses because immature cane yielded low sucrose content.
Investigations by The Standard round the mills revealed huge tracks of lorries lining up for sugar at the factories warehouses. This is even as the prices of sugar in the domestic market continued to peak. Currently, some supermarkets were hoarding the commodity in anticipation of further hike in prices.
And the commodity was now fetching as high as Sh200 to Sh250 a kilogramme depending on the supermarkets or retail outlets. The uncontrolled prices came was as a result of the unstable market supply of sugar. According to Sugar Act 2001, Kenya Sugar millers association and Kenya sugarcane growers association and Kenya sugar board, agreed on cane payment ratio per tonne.
Already, the Kenya sugar manufacturers association has met twice to try to resolve the crisis but no solution has been found yet which pre-empts more meetings still bound to be held. Given the fact that Kenya is still a net importer of sugar, there is no immediate solution that the country will get off the hook unless it builds enough capacity to be self reliant in sugarcane production. Kenya's domestic consumption of sugar is estimated at 850,000 metric tonnes of sugar against the domestic production of 535,000 tonnes.
The imports is to be guided by the deficits based on each of the six state-owned mills to check excessive supplies that may cause glut in the local market and spoil sales for local sugar. This means factories must first of all expand investment in cane development.Last Edited: Fri 02nd September 2011 at 03:06:31 PM