Treasury allows duty-free imports of sugar, maize and rice

The National Treasury has allowed the importation of 100,000 metric tonnes of brown or mill white sugar on duty-free status until the end of March.

In a new gazette notice, the exchequer says the duty-free sugar importation window aims to resolve the current sugar crisis in the country as consumers pay a premium for the commodity on global shortages and high import costs.

Kenya is forced to import sugar from countries in the Common Market for Eastern Africa and Southern Africa (COMESA) to plug the deficit in sugar demand with demand sitting at one million metric tonnes against local production which hovers around 700,000 metric tonnes.

Nevertheless, Kenya has struggled to meet its quota of sugar imports from the regional market with exporters favouring exports to other countries at favourable prices.

According to data from the Sugar Directorate at the Agriculture and Food Authority (AFA) domestic sugar production stood at 700,000 tonnes in 2021 forcing the country to import a further 426,300 tonnes of sugar.

Additional data from the Kenya National Bureau of Standards (KNBS) shows a kilogram of sugar averaged Ksh.156.78 in November, 23.2 percentage points higher than the Ksh.127.27 price tag in November 2021.

At the same time, the National Treasury has gazetted the importation of 900,000 metric tonnes of white maize grain and 600,000 metric tonnes of milled rice on duty-free status between February 1, 2023, and August 6, 2023.

The duty-free imports of maize and rice are in line with a government directive to alleviate the current food shortage/costs crisis which has been driven largely by the long-lingering drought across the year.

The Ministry of Agriculture paused the immediate import of the cereals to allow millers to first mop for produce locally as the harvest season hits.

Farmers/producers had lamented the move as they feared immediate imports of the grains would water down prices of their produce at the marketplace.