Kenya raises 2012 sugar output forecast

Kenya’s sugar production is expected to rise 16.49 percent this year, despite a shaky first-half performance caused by a shortage of cane and inefficiency at the under-funded state-owned factories, the industry regulator said on Thursday.

The east African nation is expected to produce 567,364 tonnes of sugar in 2012, up from last year’s 487,022 tonnes, a potential record, the Kenya Sugar Board (KSB) said, citing good weather.

The regulator said sugar production over the first six months of 2012 slumped 9 percent to 286,202 tonnes compared with the same period last year, hit by poor cane supplies.

“There is improved weather that is expected to boost availability of bigger supplies of quality cane for crushing,” KSB said in a regular report.

“Growers have also invested in better practices such as planting of higher yielding varieties that would uplift overall performance.”

KSB blamed the low output in the first-half to an acute sugarcane shortage especially in the Nyando and Western sugar belts.

“The poor operational performance of the parastatal sugar mills added to lowered sugar production in the review period,” KSB said.

Sugar imports jumped 130 percent to 132,755 tonnes in the first-half of 2012 compared with the previous year. The imports were mainly from the Common Market for Eastern and Southern Africa (Comesa) which supplied 82,452 tonnes.

Kenya has a sugar deficit of about 200,000 tonnes a year, which it fills through imports from other regional producers. Analysts say the country’s output is curbed by relatively high production costs.

A tonne of sugar costs about $570 to produce in western Kenya compared with $240-$290 in rival producers such as Egypt.

Kenya has an installed factory crushing capacity of 30,109 tonnes of cane per day (TCD) but expects an additional 3,000 TCD when a factory being constructed near the port city of Mombasa commences operations in April 2013.

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