Sugar prices in the country are poised to reach unprecedented highs as diminished harvests in India and Thailand, attributed to heavy rainfall wreaking havoc on crops, take their toll.
India, a crucial sugar supplier to Kenya, has already initiated restrictions on exports, impacting over 1,000 recognized local importers. This move by India is a response to adverse weather conditions associated with El Niño, resulting in crop damage and subsequently, below-average harvests. The repercussions are rippling through international markets, imposing an unprecedented strain on the sugar industry.
The United Nations Food and Agriculture Organisation (FAO) has issued a warning of a 2% global sugar production decrease in the 2023-24 season, translating into a deficit of 3.5 million metric tonnes. FAO predicts that this shortfall will predominantly affect developing nations like Kenya, as developed countries can absorb the higher costs without passing them on to the consumer.
Due to reduced shipments from India, Kenya has turned to neighboring Uganda to offset its sugar deficit, resulting in Kenyans purchasing the commodity at elevated prices from Uganda.
Following India’s decision to limit sugar exports in May to safeguard the local economy, Kenya sourced 68% of its sugar from Uganda. According to the Sugar Directorate, this caused Uganda to surpass India as the largest exporter of sugar to Kenya. However, in July, India reclaimed its position as the primary exporter, sending 24 metric tonnes of sugar to Kenya through 624 suppliers.
With the poor harvest in India, Kenya is once again turning to Uganda for sugar, expected to be 43% more expensive than that bought from India, as per the Sugar Directorate. Presently, a 2-kilogram packet of sugar is retailing at an average of Ksh420 in Kenyan supermarkets.