Expensive Sweetness: Retailers To Hike Sugar Prices As Finance Act 2023 Takes Effect, Millers Shut Operation

• The appellate court lifted orders blocking the implementation of the Finance Act 2023 on Friday, July 28
• Treasury started the implementation of the Act that saw new taxes like excise duty on imported sugar effected
• Agriculture Ministry and Food Authority issued directives to have all sugar production in Western Kenya suspended

Kenyans are staring at a further increase in sugar prices after the government introduced excise duty on imports and temporarily shut down local production.

The introduction of the excise duty followed the implementation of the Finance Act 2023 after the court lifted stay orders on Friday, July 28.

President William Ruto's administration introduced an excise duty of KSh 5 per kilogramme of imported sugar to promote local manufacturing.

Why local sugar millers suspended operations

The Ministry of Agriculture and Food Authority issued directives to local sugar millers to suspend operations until November 2023.

The move aimed at allowing sugarcane planted in the Western part of Kenya to mature took effect from Friday, July 1 4.

A spot check by TUKO.co.ke showed a 2kg packet of sugar retailed between KSh 450 to KSh 500 across supermarkets and small retail shops.

A kilo pack of sugar goes between KSh 235 to KSh 260, and this is expected to rise further due to limited supply to satisfy the over 180,000 tonnes of sugar demand in the country.

Will Kenyans do away with sugar?

The rising prices sparked debate among Kenyans, with some claiming they will no longer buy sugar.

@RBryan275 wondered;

"How did this work? Introduction of import duties is designed to boost local production, that has been suspended? Who's hoarding sugar?"

@TgMaleek noted;

"Why not invest heavily in Western Sugar Co and pay farmers hefty. Govt can hand that sector to military and I know they'll deliver. Shida zingine Kenya nizakujitakia (we create our own problems)."

@Sir_chairman_ said;

"That means, yesterday was the last day I buy sugar until further notice. Honestly, the prices are already way up."

@kirui_dom replied;

"Who is still buying sugar at that price? I stopped taking sugar 5 years ago. What does it add to your body anyway."

Duty-free sugar imports

Sugar prices have been increasing in barely months after the duty-free import window lapsed in May 2023.

In December 2022, Treasury CS Njuguna Ndung'u gazetted the importation of 100,000 metric tonnes of duty-free sugar from outside the COMESA region.

In June 2023, farmers and traders warned the prices of unga and sugar will continue to rise due to increased input and fuel costs.

They also cited issues like reduced local production in the country and increased import prices exacerbated by fluctuation in forex.