Kenya Sugar Board ordered to stop licensing new millers

By MACHARIA  KAMAU

NAIROBI, KENYA: The Parliamentary Committee on Agriculture wants the Kenya Sugar Board (KSB) to stop licensing new millers until the crises afflicting the industry have been resolved.

The committee said the presence of more players in the local sugar industry has compounded the challenges experienced by millers, cane farmers and consumers.

The industry is going through challenging times, with close to all  the millers currently making losses – including Mumias, accounting for more than 50 per cent of locally produced sugar. Muhoroni and Miwani are in receivership.

Farmers too feel they are not getting a fair return on their investments while consumer prices have been inching upwards, pushing sugar out of reach for many people.

Other problems the industry is facing include cane poaching, illegal importation and dumping of cheap sugar, which is to blame for a current glut in the market.

A meeting between the Committee and Kenya Sugar Board called for a stop to licensing of new millers until the crises in the sugar industry have been sorted out and the industry has stabilised.

Citing conflict of interest, Adan Mohamed Noor, chairman of the Agriculture, Livestock and Co-operatives Committee kicked out KSB board members.

“Some of the board members were millers and that could constitute a conflict of interest,” Noor said.

Having many millers has put a strain on the available raw materials and increased instances of cane poaching.

The Parliamentary committee says the industry should be consolidated and have few but strong players, a view that is supported by some of the sugar companies.

The challenges facing the industry are compounded by the end of the Common Market for Eastern and Southern Africa (Comesa) safeguards early next year.

The safeguards have insulated the local sugar industry by regulating the inflow of sugar from Comesa countries. Opening up the local market for imports could cripple the Kenyan industry.

sustainable remedy

“We are a high cost producer and that has made Kenya unattractive. The cost of producing one tonne of sugar is S$1,000 in Kenya, compared to $350 in countries like Swaziland and Sudan,” said Rose Mkok, the chief executive of KSB.

She said the long-term sustainable remedy for the sugar industry is to make it viable and competitive.

“Several initiatives have been identified… which if implemented will guarantee competitiveness,” added Mkok.

Among the initiatives cited were the diversification of production offering by the sugar millers to include electricity generation, production of ethanol, industrial sugar and alcohol.

She also said there are plans to introduce early maturing cane. The cane used by farmers at the moment takes upwards of 24 months to mature.

Kenya Sugar Research Foundation has also developed a variety that can mature in just 10 months.