From Kulea price trends, Kenya sugar prices increased by USD 6 per ton in both Nairobi and Mombasa markets for VHP sugar. Ugandan brown sugar prices dropped by 2 percent last week despite the country’s largest factory, Kakira Sugar, halting production temporarily for annual maintenance. The factory has stopped new sugar sales until June 10, 2024, when it is expected to resume milling activities. Reduced raw material costs and improved sugar production from January to April 2024 have consistently lowered domestic sugar prices since the start of the year.
Kenya
For world market brown sugar, imports into Kenya have been temporarily blocked pending further directions from the High Court. New York raw sugar prices have declined significantly in recent weeks, and based on the levels as of Friday, May 18, 2024, there is over USD 50 per ton positive import margin if duty-free importation resumes. However, the EAC market offered an unfavorable parity for VHP.
Port Line-Ups
For another week, no vessels were loaded with any type of sugar destined for Kenya. However, about 30,000 tons of brown sugar that were initially stuck at Mombasa port have been cleared into the market, maintaining high sugar stock levels in Kenya and keeping local prices depressed.
News
Kenya
**Industry Regulators, Millers, and Farmers to Resolve Sugarcane Pricing Dispute:**
The Ministry of Agriculture met with millers and sugarcane grower representatives to resolve the ongoing standoff over sugarcane purchase prices. Sugar producers have expressed willingness to reconsider their threat of shutting down operations following the Agriculture and Food Authority's (AFA) directive urging all stakeholders to engage in constructive dialogue. However, millers warned they might have to cease operations if cane prices are not substantially reduced, as they cannot sustain significant losses.
Eswatini
State to Increase Sugar Exports to the USA
The Ministry of Industry and Trade announced that Eswatini could export more sugar to the United States after successful engagements at the recent United States-Africa Business Summit. Eswatini explored trade opportunities, including sugar exports to the USA. In 2022, Eswatini exported 4 percent of its sugar to the USA, having received a USTRQ base allocation of 17,213 tons and an additional allocation of 8,450 tons.
Overall, the Kenyan market remained steady over the week with only slight price fluctuations per ton. The clearance of 30,000 tons of brown sugar initially stuck at Mombasa port contributed to this stability. Despite the temporary block on imports, the world market continued to show a positive parity for VHP over the EAC bloc source.
Source: Kulea.africa