During the week reported, sugar prices across East African cities experienced notable fluctuations. In Nairobi, the price dropped by USD 9 to USD 779 per ton, while Mombasa saw a slight increase to USD 764 from USD 758. Kampala's ex-factory price of brown sugar continued its decline, falling by another USD 26 per ton due to surging stock levels and limited market access in Kenya. Juba, South Sudan, experienced the most significant drop, with prices falling by USD 70 per ton (9.46%) from USD 740 to USD 670, influenced by Uganda's brown sugar surplus. Other EAC markets remained stable, benefiting from increased sugar production and limited imports from the world market.
In terms of import parities, Juba had a favorable import parity for VHP sugar from the EAC market compared to Kenya, with local sugar production making imports more expensive. Kenya, however, faced unfavorable import conditions, as reflected by negative import parity margins.
In Uganda, President Yoweri Museveni intervened in the ongoing sugarcane pricing conflict between millers and farmers. The president called for a meeting to address transparency around sugar production revenue, including profits from byproducts like electricity, ethanol, and fertilizers. Farmers, who have long pushed for a share of these profits, halted supplies to millers in July 2024 due to a drop in sugarcane prices. The price of sugarcane has fluctuated significantly, most recently falling to UGX 90,000 (USD 24.29) per ton in August 2024.
In Kenya, South Nyanza (Sony) Sugar Company is set to undergo a major maintenance operation to boost its milling capacity from 1,500 to 3,000 tons of cane per day. The USD 3.1 million revamp is part of efforts to improve sugar production and reduce payment delays to farmers, enhancing cane deliveries and morale.
Port activities for the week included shipments of refined sugar to Dar es Salaam and Mogadishu. Notably, vessel CS Sarafina was docked at Dar es Salaam, where it discharged 11,425 tons of refined sugar before sailing to Mombasa to offload the remaining 18,575 tons.
All in all, the sugar market in East Africa saw contrasting price trends in Nairobi and Mombasa, while Uganda's increased sugar production significantly impacted brown sugar prices. The region remains competitive due to improved production levels and stable prices, with Juba benefiting from favorable import parities.
Source: kulea.com
Compiled by: Victor Agut of AFA Sugar Directorate