During the reported week, wholesale sugar prices remained generally stable across major East African cities, including Kenya. However, notable price fluctuations were observed in Djibouti and Mogadishu, where VHP sugar prices dipped by 4.17% (USD 28.77) and 3.09% (USD 21.32), respectively. These price drops are linked to sustained imports from the World Market. The stability in Kenya's sugar market can be attributed to a slight strengthening of the shilling against the dollar and improved sugar stock levels. In the Southern market, cities in South Africa experienced marginal fluctuations in prices for both LQW and VHP sugar.
In Kenya, the import parity graphs indicate that most markets do not favor speculative import traders, with negative import parities recorded for the week. India did not offer any sugar contracts, while all world sources remain open for imports in the Southern region. Despite a recent increase in customs duty in South Africa, millers may need additional protection against cheaper deep-sea imports as the market remains open for imports.
In regional news, Burundi has liberalized sugar importation to address the ongoing sugar shortage. The new policy allows for greater flexibility and competition in the market, with sugar prices now determined by actual production or importation costs. Import licenses have been revoked, and new guidelines will be established by the Ministry of Trade and Finance.
In Kenya, a new bill, the Essential Goods Amendment Bill 2024, proposes to give the Treasury Cabinet Secretary the authority to set fixed maximum and minimum prices for essential goods, including sugar. The bill aims to protect low-income earners from price fluctuations and prevent market exploitation but has raised concerns about potential negative impacts on the free market.
Additionally, Savannah Crest KE Limited plans to invest approximately KShs 500 million (USD 3.88 million) for a 40% stake in Angata Sugar Mills, which is constructing a sugar milling plant in Transmara, Narok County. This investment is part of a broader trend of significant investments in new and expanding sugar projects in Kenya, particularly in Narok, Nandi, and Kericho counties.
Port activities for the week saw vessel Doris still moored at Dar es Salaam in Tanzania, with no vessels destined for Kenya. The Kulea vessel tracker reports that Propel Progress is sailing towards Mogadishu, expected to arrive on August 13, 2024, to discharge 24,750 tons of Brazilian brown sugar.
Overall, for the second consecutive week, sugar prices in the EAC region, including Kenya, have remained stable. Despite the lack of new deep-sea world market sugar shipments at the ports, Kenyan sugar prices continue to decline, aided by minor fluctuations in currency exchange rates, which help maintain competitive pricing across the region.
Source: kulea.com
Summary by: Victor Agut