KENYA: Nzoia complains smuggled sugar hurts local millers
Published: 03/12/2010, 10:57:39 AM
Sugar being smuggled in from neighbouring Uganda is hurting local players, according to Kenya's Daily Nation newspaper.
Nzoia Sugar Company managing director Saul Wasilwa said the sugar is being sold at a lower price, thus adversely affecting local manufacturers.
The sugar is allegedly being smuggled into retail stores.
Wasilwa said if the problem was not addressed, the company would have to lower its prices, resulting in lower payments to cane farmers.
Nzoia Sugar pays farmers KES3,200 (US$41.7) per tonne of sugar cane.
The company sells a 50kg bag of sugar for KES3,800 but the smuggled sugar retails for Sh3,200.
Wasilwa said the company had a stockpile of 130,000 bags because of poor sales.
"This is affecting our ability to pay the farmers," he said.
Urging the government to investigate if tax was being paid on the sugar from Uganda, he said the main markets - Eldoret and Kitale - were flooded with the product.
He questioned whether there was a surplus of sugar in Uganda or if it was a deliberate strategy to hurt local producers.
Wasilwa also criticised the issuing of licences to players who did not have their own suppliers of cane, saying this encouraged theft of the crop from farms.
The official also said Nzoia had hired a debt collector to recover money from farmers to whom it had supplied inputs but who were selling their cane to other millers.