Kenya hopes to more than halve its sugar deficit in the 2005/06 trading year helped by a strong expansion in its factories, the head of the state-run sugar regulator said on Friday.
Kenya is a net importer of sugar, and produced 516,803 tonnes in 2004 versus 448,489 tonnes the previous year.
Last year's production was the highest for the country.
Experts say Kenya runs an annual sugar deficit of 200,000 tonnes, which it has to fill through imports from countries in the eastern and southern Africa trade bloc. The east African country imported 164,000 tonnes of sugar in 2004.
"We are now investing heavily on the expansion of the productivity of our millers," Andrew Otieno, the chief executive officer of the Kenya Sugar Board, told Reuters in an interview.
"We expect to cut down the country's annual sugar deficit by more than half by the end of 2005/6 trading period."
Kenya's sugar industry supports more than six million people and is a major source of income for over 200,000 small-scale growers, who account for over 85 percent of total cane supply.
Otieno said Kenya could not effectively bargain with counterparts in various trading blocs because its annual sugar production was low.
Kenya is currently hosting a major sugar conference of ministers from African, Caribbean and Pacific (ACP) countries, but the big players at the meeting are Mauritius, Fiji, Jamaica and Guyana who export more sugar to the European Union.
Otieno said the biggest challenge in the country's sugar sector was to increase cane production because most of Kenya's six factories were operating below capacity due to lack of cane delivery.
"I think the daunting task in the sugar sector now is to increase cane development because a number of local millers sometimes go without any cane to crush," he said. The CEO said Kenya's leading factory, Mumias Sugar Company, had carried out a successful expansion programme at a cost of 700 million Kenya shillings ($9.58 million).
The expansion is expected to increase Mumias Sugar's annual production by 15,000 tonnes.
Other factories were also planning big expansion programmes, Otieno said.
"We also have Sony Sugar which has one of the most ambitious factory expansion plans. If successfully carried out, Sony is expected to produce an additional 120,000 metric tonnes of sugar per year and this will hugely go towards reducing the national deficit," he said. "This will be through by June next year."
Otieno said the sugar board was currently helping in the identification of an investor to revive Miwani Sugar Company.
"But in all these, we must ensure low cost of sugar production. We can have surplus but if the cost of producing that sugar is still heavy, we may not be able to sustain our operations because consumer will certainly go for the cheap imports," he said.
"Expansion is the only way out for Kenya's sugar shortfall. But it may not eventually be a panacea in the long term, especially if such expansion projects are not strategically planned and without due consideration to land limitations for planting, expansion and even cane transportation."
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