Sugar Prices Set to Surge as Government Doubles Import Permit Fees
Kenyans could soon face a spike in sugar prices, as the government revises import permit fees, doubling the cost for sugar import/export registration to KSh 200,000.
This substantial increase, announced by the Agriculture and Food Authority (AFA), marks a significant change to the sugar directorate service charter and is expected to have far-reaching effects on the cost of sugar and its by-products, such as molasses, bagasse, and filter muds.
The revision comes in the wake of the government’s recent decision to lift a five-month ban on local sugar manufacturing in December 2023.
The ban had put a halt to operations for many local sugar millers, but their return to business has been marked by a surge in production.
Service charter for Sugar Directorate.
— Agriculture and Food Authority-Kenya (@kenya_afa) August 29, 2024
Requirements and timelines for receiving services. #Hudumaboranihakiyako. pic.twitter.com/PZJcR2yCfv
In February 2024 alone, local millers produced 63,075 tonnes of sugar, the highest output since their resumption.
This increased supply had initially brought some relief to consumers, with sugar prices in retail outlets easing to between KSh 180 and KSh 200 per kilogram.
However, the recent changes by the AFA may reverse these gains. The fee hike, coupled with rising operational costs, is likely to push sugar prices higher.
A spot check by Skynews.co.ke on August 29, 2024, revealed that sugar prices in leading supermarkets like Naivas had already started reflecting the market pressures. A 1kg pack of sugar was retailing at KSh 175, while a 2kg pack was going for KSh 339, despite a KSh 50 discount.
Beyond sugar, the government has also implemented new levies on imported cereals, including rice and wheat flour, which will further strain consumers’ wallets.
The AFA introduced a 2% levy on the customs value of imported cereals and a 0.3% levy on cereal exports. These levies translate into additional costs for importers, with a truck of maize now costing an extra KSh 20,000 and a truck of rice an additional KSh 50,000.
As the cost of essential commodities continues to rise, Kenyans brace for an increasingly expensive grocery bill, with sugar prices now set to soar.
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Sugar Prices Set to Surge as Government Doubles Import Permit Fees
