The second week of January brought volatility to brown sugar prices across the East African Community (EAC). In Kenya, prices surged, with Nairobi recording a USD 47 increase per metric ton and Mombasa following closely at USD 38. Dar es Salaam also saw a notable rise of USD 28. However, markets in the Southern region deviated sharply, showing a pronounced decline in VHP sugar prices.
Import Parity Trends
COMESA import parities reflected a positive shift, with both the FTA and Non-FTA parities increasing by USD 33 and USD 32, respectively. This marked a significant upswing compared to earlier modest increases. Although the world market parity also showed improvement, it remained in negative territory at USD -482. EAC import parities, meanwhile, remained unfavorable at USD -24, reflecting challenges for local traders sourcing from regional markets.
Port Line-Ups
The port activities this week highlighted continued shipments to the region:
- Prince Khaled: Moored at Kandla, India, destined for Berbera, Somalia, with 7,800 MT of refined sugar.
- Aljabriya: At anchor at Kandla, India, heading to Dar es Salaam, Tanzania, with 13,600 MT of VHP sugar.
- Lucky Trader: Underway from Paranagua, Brazil, to Mogadishu, Somalia, with 24,000 MT of VHP sugar.
- Sofia II: At anchor at Kandla, India, destined for Berbera, Somalia, carrying 7,900 MT (type unknown).
- Mars J: At anchor at Kandla, India, headed to Port Sudan, Sudan, with 33,450 MT of Indian refined sugar.
According to Kulea, the Kenyan sugar market led the EAC in price hikes, with Nairobi reaching a high of USD 1,020 per metric ton for VHP sugar. This divergence from Southern market trends suggests localized supply-demand pressures in Kenya and its neighboring markets. Improved import parity for COMESA sources presents new opportunities for speculative trading, offering a silver lining amid broader market instability.
Source: Kulea
Compiled by Victor Agut