According to Kulea, wholesale sugar prices remained stable across the East African region for another week. However, the Southern market saw minor price fluctuations due to the Rand's value fluctuations against the dollar. Dar es Salaam recorded the highest price per ton in the region at USD 846, while Mogadishu had the lowest price at USD 690 for VHP sugar. The stability in the East African Community (EAC) markets is largely attributed to boosted local production and minimal fluctuations in local currencies.
In Kenya, import parities from various sources, including the EAC market, continue to project negative returns for local speculative traders. However, Somalia reported positive import parities from the world market for both refined and low-quality white sugar.
In regional news, the Ugandan government is taking steps to protect sugarcane farmers from declining prices by supporting value addition efforts through cooperatives. This initiative aims to mitigate the impact of price fluctuations, which have been partly caused by farmers growing sugarcane without prior arrangements with millers and negative regional trade practices. The sugar industry is a significant contributor to Uganda's economy, generating over UGX 300 billion in annual taxes and directly employing over 100,000 people.
Port activities during the week were recorded in Dar es Salaam, Bossaso, and Mogadishu, while no vessels were expected in Kenya. Key shipments included refined sugar and VHP sugar destined for these ports from various global sources.
Overall, the stability in sugar prices across the EAC markets reflects a well-balanced supply and demand dynamic, supported by sustained local production and minimal currency fluctuations. The unfavorable conditions for speculative trading due to negative import parities further emphasize the strength of local production and stable currency conditions in maintaining market stability.
Source: kulea.com
Summary by: Victor Agut