Over the past month, sugar prices in Nairobi and Mombasa experienced minor fluctuations, while markets in the Horn of Africa, including Somalia and Djibouti, remained stable. Similarly, sugar prices in Rwanda and Uganda showed no changes. Notably, Ugandan brown sugar prices saw a significant decline from USD 1,326 per ton on New Year’s Day to USD 812 per ton by the end of May 2024, driven by increased sugar output and falling New York raw sugar prices.
Kenya’s Import Dynamics
In May 2024, Kenya imported brown sugar from Uganda, but the landed cost was USD 63 per ton higher than Nairobi’s prevailing prices. Speculative traders are holding onto these imports, expecting future price increases.
Shipping and Port Activities
No sugar shipments bound for Kenya were reported recently, though a vessel carrying 25,000 tons of VHP sugar was anchored in Dar es Salaam.
Regional News
Kenya
Stakeholders in the Kenyan sugar industry are negotiating a new sugarcane pricing committee to replace the interim one. This follows disputes between millers and growers over cane prices, with farmers demanding KSh 5,900 (USD 45.21) per ton against the millers' offer of KSh 5,100 (USD 39.08).
Zambia
Zambia Sugar Company is planning to import electricity after ZESCO reduced its supply by 50% due to a national power deficit caused by ongoing droughts. Despite this, the company aims to maintain productivity and avoid layoffs.
Uganda
Kenya and Uganda have lifted trade blockades, following a memorandum of understanding between their presidents. This aims to enhance cooperation and eliminate trade barriers. Despite the progress, Ugandan businesses remain cautious due to past trade tensions and ongoing issues.
Conclusion
East African sugar markets have been relatively stable, with minor fluctuations in Nairobi and Mombasa. Ugandan sugar imports to Kenya were primarily speculative, held in anticipation of price increases. The market dynamics indicate a potential supply response to rising demand, with Ugandan sugar being absorbed by the Kenyan market.
Source: Kulea.africa