KENYA: Sugar firms push government to end smuggling
Published: 06/15/2012, 11:10:47 AM
Sugar firms want the government to help stop smuggling of sugar into the country, according to Kenya's Nairobi Star newspaper.
The sugar firms have already approached the Ministry of Trade and the Kenya Revenue Authority to intervene and save the industry from illegal sugar. The smuggled sugar has flooded markets in the country, especially in Western Kenya. Nzoia Sugar Company managing director Saul Wasilwa said the smuggled sugar is being sold cheaply, affecting sales for those manufactured locally.
Nzoia Sugar is currently holding more than 140,000 metric tonnes of unsold stocks due to lack of markets. Nzoia and Mumias Sugar Companies sell their sugar at between KES4,500 (US$53) and KES4,700 per 50 Kg bag while the smuggled sugar goes for about KES3,500 for the same 50 Kg quantity.
Reports indicate that the sugar is repackaged and resold by local dealers who bribe customs officers at border points to allow in the sugar from neighbouring countries especially Uganda.
Following the reports about the entry of smuggled Sugar into local markets, KRA has dispatched team of its officers to investigate the reports.
"The smuggled sugar is bound to affect our markets and that will in turn have an impact on our farmers", said Wasilwa.
Mumias Sugar Company Commercial Director Paul Murgor had also lamented that the if the illegal import are not halted, local sugar companies may be forced to reduce sugar prices and then pass the same to farmers through reduced payments for cane deliveries.
Sugar millers are currently paying farmers up to KES3,800 per tonne of sugar cane but there are fears that the payments are likely to drop to less than KES3,300 per tonne. The farmers fear that soon they may lack markets for their cane because the sugar firms will not take in more cane while holding unsold sugar.
"As much as we all need cheaper products in the markets, we think the illegal sugar trade of smuggling across the border will hurt the industry. The government has to help us stop the illegal trade", said David Kemboi who is a Sugar farmer in Nandi.
The sugar industry is extensive in Nyanza, Western and parts of the Rift Valley, the same areas which have been flooded by the smuggled sugar products. Traders said the sugar was smuggled in mostly through Malaba and Busia border points.