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Kenya suspends the issuance of sugar import licenses

15 August 2013, 17:55

Nairobi - Kenya has suspended the issuance of sugar import licenses because of hoarding by local millers of raw sugar, officials said.

The sugar sector in the east African nation of 40 million people has performed below its potential for many years due to relatively high production costs and mismanagement of factories.

Kenya's raw sugar stocks climbed to 24,979 tonnes as of August 13, against a required optimal level of 9,000 tonnes, partly due to smuggling, said Felix Koskei, the cabinet secretary for agriculture.

"This temporary suspension of import authorisation will allow the market to stabilise," he added in a statement.

Koskei said sales of imported sugar in the local market must be backed by original documentation, including tax payment certificates to "eliminate the sale of smuggled or illegally imported sugar in the domestic market".

Kenya has an annual sugar deficit of around 200,000 tonnes, which is usually filled by imports from other producers mainly in the Common Market for Eastern and Southern Africa (COMESA).

It plans to privatise five sugar factories to cut inefficiency and boost competitiveness ahead of the end of safeguards in March 2014, which limit imports from the COMESA trade bloc.

- Reuters

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