Market Overview
The past week saw divergent trends in sugar pricing across the East African Community (EAC) and Southern Africa markets. Kenya continued its upward price momentum, with both Nairobi and Mombasa recording price increases for VHP sugar.
- Nairobi: USD 1,069 per ton (+3%) – Marking a steady rise in prices.
- Mombasa: USD 1,054 per ton (+1.4%) – Reflecting strong local demand and supply constraints.
- Kigali: USD +12 per ton compared to two weeks ago, signaling moderate tightening in supply.
- Kampala: USD -56 per ton, settling at USD 917 per ton, indicating a significant price drop, possibly due to increased domestic production or imports.
Meanwhile, Southern Africa witnessed a general downturn in sugar prices, reflecting improved supply conditions in that region.
Import Parity Trends
- COMESA FTA: USD +10 – Remains the most favorable import source, sustaining a positive margin.
- COMESA NON-FTA: USD -64 – A sharp depreciation from USD +47, signaling increased landing costs and reducing its attractiveness to importers.
- EAC Market (Nairobi Import Parity): USD -14 – A notable improvement from USD -99, showing a reduction in losses for speculative traders.
Key Observations:
- EAC brown sugar imports are becoming more viable, with import parity recovering from deep negative levels.
- COMESA NON-FTA sugar is losing competitiveness, with a sharp USD 111 decline in import parity over two weeks.
- COMESA FTA remains the only source offering a positive return, making it the preferred option for traders.
Port Line-Ups
The sugar import landscape remained active, with several vessels making their way to the EAC region.
| Vessel | Status | Loading Port | Destination Port | Quantity (MT) | Sugar Type |
|---|---|---|---|---|---|
| Prince Khaled | Moored | Kandla, India | Berbera, Somalia | 7,800 | Refined |
| Aljabriya | At Anchor | Kandla, India | Dar es Salaam, TZ | 13,600 | VHP |
| Lucky Trader | Underway | Paranagua, Brazil | Mogadishu, Somalia | 24,000 | VHP |
| Sofia II | At Anchor | Kandla, India | Bosaso, Somalia | 7,900 | Refined |
| Ima Glory | Moored | Yanbu, Saudi Arabia | Dar es Salaam, TZ | 7,000 | Refined |
Notably, no vessel was flagged for Kenya, aligning with domestic production trends and a more cautious approach to imports.
Conclusion
The Kenyan sugar market remains on an upward trajectory, driven by supply constraints and sustained demand. In contrast, Uganda experienced a sharp price drop, likely due to improved supply conditions. Kigali’s market continued to tighten, reflecting regional supply pressures.
From an import perspective, COMESA FTA sugar remains the most attractive due to favorable parity, while EAC sugar showed significant improvement. However, COMESA NON-FTA imports faced sharp declines, making them less viable for traders.
The coming weeks will be pivotal in determining whether Kenyan sugar prices continue their upward trend or stabilize as new supply enters the market.
Source: Kulea
Compiled by Victor Agut of KSB