Sugar Prices to Hike Following Poor Harvest

Sugar Prices to Hike Following Poor Harvest

Sugar Prices to Hike Following Poor Harvest

Due to severe rains that devastated the crops in Thailand and India, there will likely  be a record-high spike in sugar prices in the nation. India, a major sugar supplier to Kenya, has already begun to restrict shipments,  which will affect more than 1,000 reputable local importers.

India’s decision to reduce exports is a result of unfavorable El Niño-related weather that damaged crops and produced inferior harvests. International markets are already seeing the fallout, which has put the sugar  industry under unheard-of hardship.

The Food and Agriculture Organization (FAO) of the United Nations has already  issued a warning, estimating that the 2023–24 season will see a 2% drop in world sugar production, or 3.5 million metric tonnes. As wealthier countries are able to absorb the higher costs rather than passing  them on to the consumer, the FAO predicts that developing countries like Kenya  will be disproportionately affected by the 3.5 million metric tonnes deficit.

Kenya has started depending on its neighbor Uganda to make up for its sugar shortage as a result of India’s decreased sugar imports. Kenyans are now purchasing the good from Uganda at exorbitant prices as a result. Following India’s May export ban to save the domestic economy, 68% of Kenya’s sugar was purchased from Uganda. As a result, Uganda overthrew India as the leading exporter of the product to Kenya, according to the Sugar Directorate.

With 624 suppliers from Asia shipping 24 metric tonnes of sugar to Kenya in July, India surpassed all other countries as Kenya’s top sugar exporter once more. Kenya will once more turn to Uganda for sugar due to India’s poor harvest; according to the Sugar Directorate, Ugandan sugar is anticipated to be 43% more expensive than Indian sugar.At the moment, a two-kilogram bag of sugar costs, on average, Ksh420 at Kenyan stores.