Sugar millers have hiked their ex-factory prices by as much as Sh400 per a 50-kilogramme bag despite the apparent surplus stocks of the commodity in the country.
It has emerged that Chemelil, Muhuroni, Kabras,
The 12.5 per cent increase is contrary to high expectations that prices would go down further since there is no shortage of the commodity. Retailers usually repackage the 50-kg bags in smaller quantities for re-sale to consumers.
The increase is set to impact on the retail prices if wholesalers pass on the costs down the chain of supply.
Provisional data from the Kenya Sugar Board shows cane deliveries in 2013 were highest in three years, rising to 6.67 million tonnes. Deliveries in 2011 and 2012 amounted to 5.34 million tonnes and 5.72 million tonnes respectively.
Improved cane supply is expected to lift millers' profitability as they have in the past blamed their losses on shortage.
"There is demand in the market," said Onyango, declining to offer further explanation.
Wholesalers of the commodity in Kericho county said the hike was unjustified, since millers have not incurred extra costs. They now want the government to intervene and force the companies to switch back to earlier prices.
"Government intervention would be the only solution to rein in on these companies, which despite hiking prices never consider raise for cane delivered by farmers," said
Sugar dealers allege the millers have colluded to review the prices upward to boost profitability as the commodity is now in plenty in the market.
Nairobi Securities Exchange-listed
The loss was occasioned by cane supply shortage and an influx of imported sugar, which resulted in low factory capacity utilisation. This affected its other plants - ethanol, electricity co-generation and mineral water - all which rely on by-products of cane crushed.
"We had a difficult first half and supply of cane was a challenge throughout the year due to declining yields, alternative land use and cane poaching by rival millers without cane catchments," managing director
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