Kenya Turns to Brazil for Sugar Imports as India Bans Exports
In September, Kenya found itself increasingly dependent on sugar imports from Brazil due to India’s imposition of export restrictions on sweeteners, aimed at safeguarding its domestic market.
This regulatory move by India has contributed to sustained elevated prices in the local sugar market, where mills have stopped processing the commodity due a cane shortage.
The Sugar Directorate says the country imported a substantial 32,000 tonnes of sugar from Brazil, constituting a significant 65 percent of the total sugar imports during the same period.
This surge in sugar imports pushed Kenya’s total sugar imports for September to 66,755 tonnes, marking a notable 17 percent increase compared to the previous month, when 57,250 tonnes were imported.
Kenya’s decision to favour Brazilian sugar over regional sources was primarily driven by the more favourable cost dynamics.
Brazilian sugar arrived in Kenya with a competitive average Cost, Insurance, and Freight (CIF) value of Ksh80,436 per tonne, while sugar from Uganda and Tanzania came in at significantly higher price points, with Ksh134,916 per tonne and Ksh95,685 per tonne, respectively.
The rationale for this strategic shift away from regional suppliers was further compounded by the exorbitant prices prevalent within the Common Market for Eastern and Southern Africa (Comesa), thus reinforcing Kenya’s preference for global sources.
In September 2023, the majority of table sugar was procured from Brazil, accounting for 65 percent of the total imports, followed by Zambia with 15 percent (7,125 tonnes), and Uganda with 12 percent (5,797 tonnes).
The remainder of the sugar imports was diversified, coming from Egypt, Mauritius, South Africa, and Tanzania, as confirmed by the directorate.
During this period, the average value for both white refined and mill white/brown sugar in Kenya stood at Ksh94,882 per tonne, reflecting a noteworthy nine percent increase from the previous month’s rate of Ksh87,339 for the same quantity.
India’s decision to prohibit the export of rice and sugar at a time when Kenya had been relying on cost-effective imports from this Asian nation had substantial repercussions.
Last month, Kenya experienced a complete cessation of sugar imports from India, necessitating a quest for alternative markets to fulfill its sugar needs.
Until the imposition of the sugar export ban, India had been Kenya’s primary source of sugar, offering competitive pricing on the global stage. In August, a tonne of sugar from India landed in Kenya at Ksh80,000.
With India no longer in the picture, Kenya has been compelled to seek sugar imports from Uganda and other regional Comesa member countries, thereby exerting upward pressure on sugar prices.
This trend has seen the cost of sugar per kilo increase from Sh150 at the beginning of the year to a staggering Sh250.
India’s rationale for the export ban is linked to the El Nino weather pattern, which has the potential to disrupt rainfall and consequently diminish domestic sugar production, impacting the availability of sugar for its citizens.