The East African Community (EAC) sugar market saw a continuation of upward momentum in prices over the past week, with significant increases recorded across key markets. Nairobi experienced a price hike of USD 30 per metric ton for Very High Polarization (VHP) sugar, bringing its price to USD 970 per metric ton. Mombasa followed closely with a rise of USD 24, reaching USD 951 per metric ton. Dar es Salaam saw the most pronounced increase, with an 11.66% surge translating to an additional USD 94 per metric ton for brown sugar, reflecting tighter stock levels that have intensified pressure on local prices.
Despite these price increases, import parity trends for COMESA FTA, COMESA non-FTA, and EAC sources showed notable improvement, signaling favorable shifts in external market conditions. The COMESA FTA import parity in Mombasa rose significantly, moving from USD +3 to USD +35, suggesting enhanced competitiveness for imports from this trade area. Similarly, COMESA non-FTA sources saw an increase from USD -14 to USD +18, crossing into positive parity territory. The EAC market also experienced substantial improvement, with the import parity narrowing from USD -55 to USD -5. However, despite these gains, the landing cost of EAC sugar continues to exceed domestic prices, limiting its appeal to Kenyan traders.
Port activities in the EAC region were primarily focused on destinations outside Kenya. The Prince Khaled remained anchored at Berbera, Somalia, with 7,800 metric tons of refined sugar from Kandla, India. The Golden ID was underway to the same destination, carrying a larger shipment of 27,400 metric tons of refined sugar. Meanwhile, the Ivone continued its voyage from Paranaguá, Brazil, to Mogadishu, Somalia, with a substantial cargo of 27,000 metric tons of VHP sugar. Notably, there were no significant port activities flagged along the Kenyan coast, signaling a lull in direct sugar imports to the country.
The ongoing upward trend in EAC sugar prices underscores the influence of dwindling stock levels and regional supply constraints. Improved import parities, particularly for COMESA FTA and non-FTA sources, point to a more favorable external trading environment. However, the elevated cost of EAC-sourced sugar relative to domestic prices remains a challenge for regional trade integration. As markets adjust to these dynamics, stakeholders are likely to remain vigilant, anticipating further price volatility in the weeks ahead.
Source: Kulea
Compiled by Victor Agut of Kenya Sugar Board