Kenyan sugar market remains unstable with prices remaining high amid the increased production

Compared to other regional markets, Kenya’s sugar prices still maintain its high market costs and according to Agriculture and Food Authority (AFA), the cost of sugar in Nairobi was recorded at $38 per tonne with Mombasa close behind at $30 per tonne.

Kenya is a major player in the sugar industry and according to the Observatory of Economic Complexity (OEC) Kenya exported $568k in Raw Sugar in 2022 making it the 124th largest exporter of Raw Sugar in the world.

Raw Sugar was the 397th most exported product in Kenya in the same year and the major destination are Rwanda ($287k), Uganda ($123k), Democratic Republic of the Congo ($96.9k), Malawi ($55.8k), and South Sudan ($2.75k).

The surge in demand of brown sugar has further raised concerns about the accessibility and affordability of brown sugar in Kenya, an essential sweetener for both household consumption and industrial use.

The Sugar Directorate’s September 2024 market update reports a continued downward trend in sugar prices, with the weighted ex-factory price falling to Sh5,059 per 50kg bag, a decrease from Sh5,075 in August and Sh5,325 in July. Wholesale prices also declined, averaging Sh5,367 per 50kg bag, a 1% drop from August’s Sh5,424.

Also, there was a noticeable rise in sugar production increasing from 73,409 tonnes the previous month, to 73,634 tonnes.

However, despite the rise in production, and subsequent drop in factory prices for sugar as confirmed by the monthly statistics report released by the Agriculture and Food Authority’s sugar directorate, the price of the commodity is still high in some retail shops across Kenya.

A spot check conducted by The Star across major retail stores in the city revealed a sharp increase in the cost of sugar prices, in some instances by Sh20, compared to a couple of months ago.

A two-kilogram packet of Kabras sugar retailed at Sh269 in some retail stores, up from an average of Sh250 in August.

The prices of a 2-kilogram bag of sugar was also seen to vary across retailers, with Quickmart offering different brands at between Sh249 and Sh269, Naivas selling all brands at a uniform price of Sh259, and Carrefour pricing its Mumias Sugar at Sh283 and its economy white sugar at Sh249.