Posted on 1st Jan 1970 01:00:00 in
Cane farmers have protested against a decision to reduce the tonnage price of sugarcane as the industry grapples with an acute shortage of cane.
Yesterday, the Kenya Sugar Directorate Chief Executive Officer Solomon Odera said the price had been reduced because millers could not afford to pay the price they were being charged by farmers.
“The minimum price per tonne has now been capped at Sh4,052 by the cane price committee,’’ he explained. This is lower than the Sh4,320 millers were being charged.
“Some of the millers could not sustain paying Sh4,350 because of the shortage of raw materials,” he told Saturday Standard in an interview.
Minting more money
The Sugarcane Pricing Committee guides the industry on the recommended minimum price of cane on a monthly basis after analysing market trends.
However, the downward revision of prices has been criticised by the Kenya National Sugarcane Growers Association. See Also: Troubled Mumias receives Sh500 million from Treasury
The association’s secretary general, Mr Richard Ogendo, said the price should not be lowered because sugar is currently in high demand.
“We should not lower the price of sugarcane per tonne when molasses, which is one of the by-products of sugarcane, is fetching Sh20,000 a tonne and this has not even factored in,” said Mr Ogendo.
Four months ago the tonnage price of sugarcane was raised from Sh4,200 to Sh4,350 per tonne due to high demand of the produce.
The increased demand for sugarcane has resulted in widespread poaching by private millers, most of whom do not have contracted farmers.
The adjustment of the price of sugarcane is often a contentious issue and yesterday, the Sony Sugar Company management board declined to pay the reduced price for sugarcane.
Instead, a meeting chaired by Ambrose Weda resolved to maintain the pay per ton at Sh4,320. “We will continue to pay Sh4,320 for cane per tonne despite the official lowering of the price per ton down to Sh4,050 by the Sugar Pricing Committee,” said Mr Weda.
Weda noted that even though raw materials were in short supply, business was thriving.
“No farmers arrears exist to date. We pay them Sh160 million a fortnight upon delivery of cane,” he said.
However, other millers indicated they would pay farmers the lower price for their cane, a move that has been criticised by farmers.
The Kenya National Federation of Sugarcane Farmers Association said the price review was unrealistic.
The association’s chief executive Francis Waswa said that given that demand for sugar has risen, prices paid to the producers should reflect this rise.
“This means that when sugar is retailing at high prices, then it simply means that millers are minting more money. Suppliers of the raw material should equally benefit.”