Kenya wins extension of Comesa sugar import safeguards

Kenya Comesa Sugar
Kenya is struggling to improve its sugar output. PHOTO/FILE
Regional trade bloc Common Market for Eastern and Southern Africa (Comesa) has granted Kenya a two-year extension of sugar import curbs cushioning local millers from losses due to influx of cheaper sugar.

The current sugar safeguards period was scheduled to expire in February 2017, but Kenya has now secured approval for an additional safeguard period up to February 2019 from the Comesa.

The regional trade bloc cited the 2017 General Election as one of the grounds for curbing sugar imports from the trading bloc for another two years.

Sugar cane farming is the main economic activity in western Kenya and there were fears that the opposition coalition Cord could use the issue of free imports to campaign against the government.

“Imports of cheap sugar will be used as a campaigning tool against the ruling coalition,” said a Kenyan official who requested anonymity.

Comesa said it was aware that court cases stopping the privatisation of the State-owned mills had also delayed the Kenya’s plan to revamp its ailing sugar industry.

Alfred Busolo, the director-general of Agriculture and Food Authority (AFA) said that the government will “use the extension of the safeguard to agree on a privatisation road map and court issues”.

The expiry of sugar import safeguards was expected to expose the Kenyan market to strong competition from sugar made cheaply within the Comesa region.

Kenya is struggling to improve its sugar output due to high production costs and money-losing sugar factories, which produce 600,000 tonnes of sugar annually, below the yearly consumption of 800,000 tonnes.

The 200,000 tonnes shortfall is covered through import quotas from Comesa.

The trade bloc has granted Kenya the extension to give the country more time to privatise State-owned sugar factories, transform to using early maturing cane, diversify the revenue chain, and move away from tonnage-based payment for sugar cane to a system pegged to sucrose content in the cane supplied by the farmers.