From the Kulea price trends, sugar prices in Kenya saw an increase of USD 12 per ton in Nairobi and USD 18 per ton in Mombasa. This slight rise is attributed to slightly better production compared to the previous week and the large amount of imported sugar in Kenyan warehouses, which helped keep prices low. Uganda's local production rebound led to significant stockpiles, putting pressure on prices there. Djibouti continued to receive notable import arrivals, and lower world market prices exerted downward pressure on domestic values. In South Africa, domestic sugar prices remained unchanged in rand value but dropped slightly due to the rand's strength against the US dollar. Rwanda saw a drop in average brown sugar prices by USD 35 per ton (3.4%) due to increased imports from Uganda, which are currently cheaper than world market brown sugars.
Kenya
For world market sugar origin, the Mombasa market showed a positive import parity for re-bagged raw sugar. However, the Nairobi market continued to register unfavorable import offers for VHP.
Port Line-Ups
During week 19, no vessels loaded bulk raw sugar for Kenyan destination ports. However, for the larger EAC region, 82,600 tons of refined sugar were nominated for Sudan in the previous week’s sugar line-up from India.
News
Kenya
Millers Threaten to Cease Production Over Cane Price Standoff
Kenya's sugar producers have threatened to halt milling operations from May 10, 2024, due to disagreements with farmers over cane purchase prices. This follows a High Court suspension of the reduction of sugarcane prices from KShs 5,900 (USD 44.91) per ton to KShs 5,100 (USD 38.82) after a farmers' petition. Growers opposed the new prices, arguing they disproportionately benefited millers. The High Court has directed the maintenance of the previous price of KShs 5,900 until the case is resolved, but millers claim this order violates the Sugarcane Pricing Committee’s mandate and their contractual arrangements with farmers.
Uganda
Government to Verify Miller Nucleus Estates and Registered Cane Growers
The Ministry of Trade, Industry, and Co-operatives, in collaboration with sugar sector stakeholders, will verify the established nucleus estates and registered out-growers of each sugar mill in the Busoga, Buganda, and Bunyoro regions. This initiative aims to streamline miller operations and address challenges in cane growing and supply to factories. The verification exercise will take place from May 13 to May 26, 2024.
Tanzania
Government Plans to Boost Cane Production
The Sugar Board of Tanzania, in partnership with the Tanzania Prisons Production Corporation, plans to cultivate cane seedlings on 400 hectares of land in Morogoro. This initiative aims to provide farmers with seedlings to improve national cane and sugar output. Efforts are also underway to identify areas suitable for cultivating more sugarcane under irrigation. Tanzania currently produces about 4.2 million tons of sugarcane annually, yielding approximately 392,724 tons of sugar.
The Kenyan sugar market witnessed a mixed trend with prices increasing in Nairobi and Mombasa due to slightly improved production and large imported sugar stocks. Overall, the EAC market prices remained low due to surplus stocks from increased local production exerting downward pressure on prices. These market trends reflect the influence of domestic production, imports, and global factors on price fluctuations in the Kenyan and regional sugar market.
Source: Kulea.africa