Kenya expects to produce a record 500,000 tonnes of sugar in 2004, a 12.8 percent rise on last year, boosted by reforms that have ensured farmers are paid promptly for cane, a senior industry official said on Thursday.
"Indications are that the sugar industry may hit a record sugar production of over 500,000 tonnes this year, attributed to stability in most sugar companies and supported by increasing demand for local sugar," Kenya Sugar Authority (KSB) head Andrew Otieno said in a document circulated to delegates at an industry conference.
Output is expected to rise to 503,000 tonnes this year from 446, 000 in 2003.
President Mwai Kibaki said on Tuesday that sugar production in the first half of 2004 rose to 290,030 tonnes from 224,337 in the same period last year.
Otieno said sugar factories had began making profits, helping to pay farmers on time for cane deliveries.
Kenya's peasant farmers have long complained of delays in payments.
KSB statistics showed sugar imports had dropped to 128,356 tonnes in January-July from 152,536 in the same period last year following government's restrictions aimed at stabilising prices.
Stocks held by factories had fallen to 7,608 tonnes by July this year from 15,676 in January, KSB statistics show.
"The decreasing trend in sugar stocks despite higher sugar production this year is an indication of a better market environment for local sugar following curbing of illegal imports by the government," Otieno said.
The government recently restricted sugar imports to a group of about 80 private sector firms approved by the sugar authority.
In the past, the industry was unregulated and traders could import as much sugar as they could afford to bring into the country, making sugar held by local factories uncompetitive.
Kenya's sugar consumption is estimated at 650,000 tonnes.
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