Last week, the East African sugar market experienced notable shifts, with Kenyan sugar prices showing signs of stabilization after a prolonged period of increases. Specifically, prices in Nairobi and Mombasa dropped significantly, by USD 31/MT and USD 38/MT, ending the week at USD 943/MT and USD 913/MT, respectively. This decline reflects a potential easing of supply pressures. In contrast, Kampala witnessed a sharp price surge of USD 63/MT, while markets in Dar es Salaam and Mogadishu maintained stable pricing, contributing to a relatively calm outlook for the broader East African Community (EAC) region.
Import Parities
The week also saw mixed results in import parity trends for sugar imports into Kenya:
- COMESA FTA Market: Mombasa registered a negative import parity of USD -6, signaling that the landed costs are just slightly below domestic prices.
- COMESA Non-FTA Market: Also turned negative, with an import parity of USD -27, indicating less favorable conditions for imports compared to previous weeks.
- EAC Market (Nairobi): Continued to struggle with a significant negative parity of USD -112, making imports from the EAC region less competitive.
These negative import parities suggest increased costs for sugar imports, particularly from EAC sources, which may pressure local prices if sustained.
Port Line-Ups
The sugar port line-up for the EAC region was as follows:
- Prince Khaled: Currently underway from Kandla, India, heading to Berbera, Somalia, with 7,000 MT of refined sugar.
- Golden ID: Moored at Kandla, India, set for Berbera, Somalia, carrying 27,400 MT of an unspecified sugar type.
- Crystal O: Moored at Kandla, India, destined for Mogadishu, Somalia, with 30,000 MT of refined sugar.
These shipments indicate ongoing activity in sugar imports, particularly from India to East African destinations, potentially influencing regional supply levels.
The Kenyan sugar market showed signs of easing for the second consecutive week, particularly in Nairobi and Mombasa. However, rising sugar prices in Uganda have intensified challenges in Rwanda, where the market remains under pressure due to high export prices. The fluctuating import parities after a previously promising trend further underscore the volatility in the regional sugar market, presenting both opportunities and risks for traders.
Source: Kulea
Compiled by Victor Agut of AFA - Sugar Directorate