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Sugar Crisis Embitters Kenyans

  • Raymond Thibodeaux

Kenyans are in a sugar crisis. There is not enough sugar to go around, and that has Kenyans asking why.

Anyone who has tasted Kenyan-style tea knows how much Kenyans love sugar. They consume about 650,000 tons of it every year, which amounts to about 40 pounds of sugar per Kenyan per year.

Local sugar makers are having trouble keeping up with demand, forcing Kenya to import about 200,000 tons of sugar annually. And that is where the trouble begins.

About 80,000 tons of imported sugar - mainly from Egypt - have been stranded for months in the Kenyan seaport of Mombasa. Sugar importers and distributors are awaiting a decision by Kenyan officials on whether the sugar should be taxed or let in duty-free, in line with new trade rules set forth by the Common Market for Eastern and Southern Africa, known as COMESA.

What does this mean for the ordinary consumer? Sugar prices are going up. And grocery stores in Kenya are limiting how much sugar each customer can buy.

Analysts say the larger issue is whether Kenya and other countries signed on with COMESA can continue protecting their markets from cheap foreign competition from other COMESA members.

Last year, COMESA gave Kenya until 2008 to open its markets to duty-free imports from other COMESA members.

Patrick Mayoyo is a reporter who has been following the sugar crisis for The Nation, Kenya's major daily newspaper.

"The issue is, this four-year period is supposed to be used by the government of Kenya to reform the sugar sector, but, so far, little is being done," he explained. " So, by the time this four-year period is going to expire, Kenyan sugar will not be able to compete with cheap sugar from the COMESA region. And this is why stakeholders in the sugar industry are fearing that the free-for-all after the expiry of this regulated period is going to lead to the collapse of the sugar sector in this country."

Kenya's agricultural minister downplays the idea that stalled sugar imports are to blame. He accuses sugar producers of hoarding their own product, creating an artificial shortage in order to reap huge profits.

But the head of the Kenya Sugar Board, Andrew Oloo Otieno, explains that Kenyan sugar farmers, already burdened by heavy debt and government taxes, are struggling to figure out how they are going to survive in an open market.

Mr. Otieno is hopeful, partly because the alternative is for Kenyans to spend $400 million on sugar imports. That is money going out of the country, and Mr. Otieno thinks that is not want Kenyans want.

"Either we become competitive, or we get wiped out," he said. "If we get wiped out, say, by the time trade is liberalized in 2008, we will end up spending about $30 billion shillings [$390 million) per annum importing sugar. We do not want to go that way. That is why we have to put in a concerted effort to ensure we are competitive."

In the meantime, Kenyans will have to skimp on sugar.

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