Local sugar milling firms raise alarm over high levels of illegally imported sugar

By Stephen Makabila and Robert Wanyonyi

Nairobi, Kenya: Local sugar milling firms have raised the alarm over high levels of illegally imported sugar.

Nzoia Sugar Company Managing Director Saul Wasilwa, has, for example, said the company has 55,000 bags of processed sugar valued at over Sh350 million, but which it cannot sell because of imports.

Kenya consumes about 9,000 tonnes of sugar a week, which is met by a mix of locally produced and imported sugar. Ordinarily, the sugar available on the shelves is usually in this range.

Last November, the Kenya Sugar Board (KSB) Chief Executive Rose Mkok attributed the influx in supply (which was as high as 27,000 tonnes at certain points) to illegal imports, but added that her agency, the Agriculture ministry and industry players had met several times to craft a strategy that would ensure the situation does not affect the local industry.

Rogue traders have been smuggling and dumping sugar meant for export markets. The cartels are also said to be playing a hand in crippling government-owned millers, most of which are struggling to operate.

On Wednesday, Members of the Parliamentary Committee on Agriculture made an impromptu visit to a depot it said belongs to Mumias Sugar Company and discovered more than seven tonnes of sugar.

Committee vice-chairman Kareke Mbiuki accused Mumias of giving preference to imported sugar and neglecting its product.

Benjamin Wachiali, a member of the committee and the Mumias West MP, said the committee would recommend the sacking of the company’s management.

Mumias Sugar Managing Director Peter Kebati, however, denied that the firm imported more than the 10,000 tonnes it was licenced to bring into the country between March 22 and May 22 last year.

He said Mumias had not released the sugar it had imported to the market fast enough, causing the stock that was found in the go-down to remain in store about a year later.

Recently, The Standard On Sunday published a special report on how sugar was smuggled into Kenya. The investigative report showed several routes, some in the North-Eastern part of the country, through which illegal and cheaper sugar was brought in by unscrupulous but highly connected dealers, who went on to make maximum profits from the products.

 But this is not the only problem faced by sugar milling companies in the country. Milling firms and stakeholders in the sugar sector now want the government to take a decisive action in containing sugar poaching.

Nzoia Outgrowers Company Chairman Joash Wamang’oli has appealed to President Uhuru Kenyatta’s direct intervention, claiming some big names are involved.

Illegal agents

“We want the President to visit us or he gives us a chance to meet him as representatives of farmers, and we will name and shame MPs involved in cane poaching,” said Wamang’oli.

Mumias Sugar has equally been decrying the re-emergence of cane poaching in its zone and wants the government to introduce stricter measures to end the menace.

Mr Kebati told The Standard on Sunday the company was by end of last year losing up to 800 tonnes of its cane daily to agents working, illegally, for a rival sugar miller.

The MD said cane poaching has seen its machines operate below capacity. “In monetary terms, we are losing about Sh2.4 million daily due to the re-emergence of the cane theft in a new form,” Kebati told The Standard on Sunday in an earlier interview.

Wamang’oli says it is not easy to eradicate cane poaching when MPs are involved in the vice.

“The government and local leadership should be fully involved and committed in ensuring farmers contracted to some milling firms do not end up being conned to divert harvested cane to other companies, thus subjecting contracting companies to losses,” said Wamang’oli.

Emmanuel Adol, a farmer in Miwani, blames the rampant cases of poaching to the culture of cane burning promoted by arson activities.

“When cane in the farms is burned, farmers opt to sell it elsewhere when the company they are contracted to delays to move in,” says Adol.

There have been complaints over Sony, Sukari and Trans Mara sugar factories, which are situated close to one another, over the control of cane believed to be under the Sony belt.

A temporary injunction was a few months back issued by a tribunal stopping the two new entrants from harvesting cane from the Sony areas. The ruling was made by the Kenya Sugar Arbitration tribunal after Sony made claims of cane poaching by the two factories, which it claimed did not have a nucleus.

One of the requirements for a miller to acquire an operating licence is proof of having raw materials.