The national average price of sugarcane delivered to various mills fell further this month, cutting into farmers’ profits but giving relief to consumers through lower retail prices.
The Sugarcane Pricing Committee – an independent panel comprising the Agriculture and Food Authority, the Ministry of Agriculture, farmers, millers and sugar producing districts – has reduced sugarcane prices to Sh4,950 per tonne in August.
This is down from Sh5,125 per tonne in June. In February, sugarcane was priced at Sh6,100 per tonne, meaning the cost of the raw material has fallen by 18.85 percent over the six months to August.
“Following the conclusion of the interim sugarcane pricing committee and in the absence of the Cabinet Secretary to appoint it, the interim price of a tonne of sugarcane for the month of August is set at Sh4,950,” Jude Cheshire, acting director of the Sugar Directorate, wrote in a letter to farmers.
Mr. Chesser is the Secretary of the Committee.
The head of the Afghan Sugarcane Union, Korneli Serim, said that the abundant rains since last year and the state support for fertilizers have led to a sharp increase in sugarcane production.
“Last year, we were grinding about 17,000 tonnes per month. Now, we are grinding about 80,000 tonnes per month because of the availability of cane in the market,” Mr. Serem said.
The surplus supply of sugarcane has eased retail prices of the commodity, giving a boost to consumers. A random check in Naivas showed that a kilogram of sweetened sugar was retailing at between Sh139 and Sh180.
This is a significant drop compared to March this year when the retailer was selling the commodity at between Sh185 and Sh200 per kilogram.
According to data from the Afghan Farmers Union, domestic sugar production reached 75,685 tons in June, more than double the 34,072 tons in the same month last year.
Mr. Serem added that the surplus cane was partly due to mills resuming cane grinding. The state had limited mills’ capacity to grind cane between July and November last year to allow immature cane to mature.
“Since we resumed milling, farmers have started harvesting sugarcane that matured during the period when we restricted mills to milling at half capacity,” he said.
All eyes will be on new Agriculture Minister Andrew Mwiha Karanja who will set up a new sugar pricing commission.