SUGAR MILLERS IN KENYA TOLD TO COMPETE WITH THEIR COMESA PARTNERS

01/11/2007
GRANTS ARCHIVES AGAJA KUYO BARUPE WECHE DONGRUOK MBAKA NONRO JEXJALUO NGECHE LUO GI GWENG' THUM TEDO LUO KITGI GI TIMBEGI SIGENDNI LUO THUOND WECHE ;	LUOCOME Kisumu, 10.1.2007 SUGAR MILLERS IN KENYA TOLD TO COMPETE WITH THEIR COMESA PARTNERS By Leo Odera Omolo The sugar issue in Kenya has never been sweet news. Players in the sugar sub-sector of the national economy have been asked to speed up reforms because concessions made previously will not be extended after next month (February) deadline. Kenya had earlier on negotiated for a three year grace period to enable the sector to recover from years of mismanagement. But the country's Trade and Industry Minister Dr.Mukhisa Kituyi has assured the stakeholders in sugar manufacturing and trade that the government is actively negotiating with its partners in the Common Market for Eastern and Southern Africa (COMESA) trading bloc seeking extension of a sugar import quota. Under the existing waiver in the free trade area (FTA) Kenya is allowed to tax all but 200,000 tonnes of sugar from the region to protect competitive .The waiver period ends in February 2007. The Minister disclosed that the government has entered into negotiation on realizing that the industry is not in a position to compete with imports. He said that although progress had been made in strengthening the local industry, much more is still needed to be done to enable Kenya's produced sugar to compete effectively in the region. Through the existing agreement the annual import of sugar firm COMESA countries is restricted to 200,000 tonnes to offset the consumption deficit. Kenya is currently producing 600,000 tonnes of made sugar annually while domestic consumption of the same commodity is 800,000 tones per annum. This leaves a deficit of 200,000 tones which must be sourced from her COMESA partners. No duty is charged on the 200,000 tonnes imported into the country. "When the waiver comes to end, the floodgates will be opened to other competitors" the Minister said. He expressed fears that should the waiver come to an end before the necessary reforms are complete, farmers would be negatively affected since the market would be liberalized. "We negotiated for this waiver for three years to strengthen the sugar sector and promised there would be no extension on the expiry of the period," he added Dr.Kituyi said it was encouraging that there has been turn around in sugar firms like Mumias and Sony through cleaning of their balance sheets and paying back-log of Kshs 300 million that they owed cane farmers. Other areas that had to be improved were "procurement, cutting of overhead costs and providing farmers with quality seed with high sucrose contents level," said the Minister adding that there is need to collectively fast the implementation of reforms. Millers and the Kenya Sugar Board had to work out strategies on how to reduce middlemen and improve financial base management to cut costs and pass the benefits to cane farmers Dr.Kituyi said there was no major difference in price between local and imported sugar and advised players in the sugar industry to improve on this to make local sugar cheaper. He added, "Even with the full importation of COMESA quota, sugar shortage would always persist occasioning the local consumers to pay high prices besides having difficulties accessing the commodity because the shortage and high prices are symptoms of an active sector which has failed to take advantage of the safeguard given by COMESA" Some efficient producers in the 20 member Comesa region include Malawi, Swaziland, Mozambique and Zimbabwe. According to strategies recently released by the Kenya Sugar Board (KSB), the sugar industry regulator, a total output in the first six months of last year rose to 115,888 tones from 112,933 tones in the same period in 2005. ENDS leooderaomolo@yahoo.com The writer is LUOCOME REPORTER based in Kisumu. We urge all LUOCOME members with pressing issues pertaining to media and press releases to kindly contact him from any where in world. He will assist you to get true picture of your Village Developement. LUOCOME-MEDIA ===================================================== Joluo.com Ka in gi mari moro ma di wandik ka to orni Akelo nyar Kager, jaluo@jaluo.com Daher winjo dwondi in bende, iwinjo?	IDWARO TICH? INJILI GOSPEL GALAMORO : Riwruok mar JOLUO e Piny Ngima, orwaku uduto mondo ubed e kanyakla mar burani. Ornwa nyingi gi nondi kaka obedo. Riwruok e teko joka Nyanam. WENDO MIWA PARO OD PAKRUOK

LUOCOME
Kisumu,
10.1.2007

SUGAR MILLERS IN KENYA TOLD TO COMPETE WITH THEIR COMESA PARTNERS

By Leo Odera Omolo

The sugar issue in Kenya has never been sweet news. Players in the sugar
sub-sector of the national economy have been asked to speed up reforms because concessions made previously will not be extended after next month (February) deadline.

Kenya had earlier on negotiated for a three year grace period to enable the
sector to recover from years of mismanagement.

But the country's Trade and Industry Minister Dr.Mukhisa Kituyi has assured
the stakeholders in sugar manufacturing and trade that the government is actively negotiating with its partners in the Common Market for Eastern and
Southern Africa (COMESA) trading bloc seeking extension of a sugar import quota.

Under the existing waiver in the free trade area (FTA) Kenya is allowed to tax
all but 200,000 tonnes of sugar from the region to protect competitive .The
waiver period ends in February 2007.

The Minister disclosed that the government has entered into negotiation on
realizing that the industry is not in a position to compete with imports.

He said that although progress had been made in strengthening the local
industry, much more is still needed to be done to enable Kenya's produced sugar to compete effectively in the region.

Through the existing agreement the annual import of sugar firm COMESA
countries is restricted to 200,000 tonnes to offset the consumption deficit.

Kenya is currently producing 600,000 tonnes of made sugar annually while
domestic consumption of the same commodity is 800,000 tones per annum. This leaves a deficit of 200,000 tones which must be sourced from her COMESA partners. No duty is charged on the 200,000 tonnes imported into the country.

"When the waiver comes to end, the floodgates will be opened to other
competitors" the Minister said.

He expressed fears that should the waiver come to an end before the necessary reforms are complete, farmers would be negatively affected since the market would be liberalized. "We negotiated for this waiver for three years to
strengthen the sugar sector and promised there would be no extension on the
expiry of the period," he added

Dr.Kituyi said it was encouraging that there has been turn around in sugar
firms like Mumias and Sony through cleaning of their balance sheets and paying
back-log of Kshs 300 million that they owed cane farmers. Other areas that had to be improved were "procurement, cutting of overhead costs and providing farmers with quality seed with high sucrose contents level," said the Minister adding that there is need to collectively fast the implementation of reforms.

Millers and the Kenya Sugar Board had to work out strategies on how to reduce middlemen and improve financial base management to cut costs and pass the benefits to cane farmers

Dr.Kituyi said there was no major difference in price between local and
imported sugar and advised players in the sugar industry to improve on this to
make local sugar cheaper. He added, "Even with the full importation of COMESA quota, sugar shortage would always persist occasioning the local consumers to pay high prices besides having difficulties accessing the commodity because the shortage and high prices are symptoms of an active sector which has failed to take advantage of the safeguard given by COMESA"

Some efficient producers in the 20 member Comesa region include Malawi,
Swaziland, Mozambique and Zimbabwe.

According to strategies recently released by the Kenya Sugar Board (KSB), the sugar industry regulator, a total output in the first six months of last year rose to 115,888 tones from 112,933 tones in the same period in 2005.

ENDS
leooderaomolo@yahoo.com

The writer is LUOCOME REPORTER based in Kisumu. We urge all LUOCOME members with pressing issues pertaining to media and press releases to kindly contact him from any where in world. He will assist you to get true picture of your Village Developement.
LUOCOME-MEDIA