Kenyan consumers are paying at least Sh25 more per kilogramme of sugar compared to other countries in the region as local millers incur excess of Sh25,000 to produce a tonne of the commodity.
According the Sugar Industry Stakeholder Taskforce Report released on Monday, cane growers in the country spend about Sh80,920 to generate a tonne of sugar compared to a landing cost of Sh55,632 of sugar from the region.
The value is even higher when compared to the global market rate which stands at a paltry Sh45,518 for a tonne of the sweetener.
The huge cost difference is blamed on Kenya’s inefficiencies across the entire value chain. The report released by the 16-member government task force cited inefficiencies right from cane development, harvesting, transport, milling and marketing as well as high cost of inputs, labour and credit.
“This not only renders the industry uncompetitive but makes Kenya an attractive destination for imports globally.
“Imports from low cost producers dampen sugar prices creating financial constraints when the local mills cannot offload sugar to the market,” noted the report.
To address the challenges, the report says there is urgent need for an efficiency and cost reduction strategy along the entire value chain.
The initiative is envisaged to enhance the overall efficiency of the industry, reduce the cost of production and sugar.
This comes as the task force chaired by former Agriculture Secretary Mwangi Kiunjuri and Kakamega Governor Wycliffe Oparanya pointed out that there has been a decline in total area under cane since 2015 from 223,605 Hectares to 191, 215 Ha in 2018.