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Kenya Sugar Board predicts 2014 growth in production

27 January 2014, 16:07

Nairobi -  Kenya's raw sugar production is expected to climb 17 percent to 700,000 tonnes in 2014, helped by improved supply of cane and higher factory capacity, the Kenya Sugar Board said on Monday.

East Africa's biggest economy has an annual sugar deficit of around 200,000 tonnes, which is usually filled by imports from producers in the region.

Kenya is struggling to improve output due to relatively high production costs and poorly funded sugar factories.

"The projected sugar production in 2014 is 700,000 metric tonnes made from 7.5 million tonnes of cane," Kenya Sugar Board Chief Executive Rosemary Mkok told Reuters in an emailed response.

KSB said Kenya produced a record-high 600,179 tonnes of sugar in 2013, up from a revised final inventory of 502,563 tonnes the previous year.

"All the sugar factories reported increased production with the notable exception of Mumias and Nzoia sugar companies, both in the western sugar belt," Mkok said.

The country produced 6.67 million tonnes of cane in 2013, up from 5.82 million the previous year.

Kenya has an installed factory crushing capacity of 30,109 tonnes of cane per day and expects an additional 3,000 tonnes to be added when a factory being constructed near the port city of Mombasa starts operations.

The factory - Kwale International Sugar Company - is 25 percent owned by Mauritius' Omnicane.

"We expect the Kwale International Sugar Company Ltd at the south coast ... to commence operations in July 2014," Mkok said.

The regulator estimated the cost of producing a tonne of sugar at about KES 48,500 in western Kenya compared with KES 20,500 - KES 25,000 in rival producers such as Egypt.

Kenya plans to privatise five sugar factories to reduce inefficiency before the end of trade safeguards that limit imports from the Common Market for Eastern and Southern Africa (COMESA) trade bloc.

The safeguards are scheduled to end in March 2014 but Kenya has indicated it will seek an extension until 2015 to conclude key reforms in its sugar industry.

"The Department of Commerce and Tourism is in the process of formalising the request for extension," Mkok said.

- Reuters


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