Sugar prices are becoming bitter as they rise to 21 birr per kilo in a move to help mills cover production costs.
It’s a significant jump from the current 18.40 per kilo price that has been in effect for the last four years. This will likely affect drink and food prices as they include the sweet.
The City of Addis Ababa gets 120,000 quintals of sugar from the Sugar Corporation. They then distribute it to consumer’s associations and EtFruit, which in turn serves the end user. Previously the Sugar Corporation sold sugar at 1,400 birr per quintal but they have raised the price to 1,641 birr per quintal. Regional states will likely increase sugar prices as well although the exact amount will vary.
Sources close to the issue told Capital that a price hike has been in the pipeline but that they wanted to wait until the old stock was sold.
“We didn’t want to mix the old stock with the new stock so we held off on the price hike but now it will go into effect. Even though cane is planted here companies are experiencing trouble due to the high raw material cost because they import from abroad.’’
The Corporation imports over three million quintals of sugar annually to fill the supply gaps that occur due to the recurring shortage.
According to the public relations head of the Sugar Corp; sugar factories in Metehara, Wonji, Fincha, Kesem, Arjo, Tendaho and Kuraz 2, and Kuraz have a sugarcane crushing capacity of 5,000, 6,250, 12,000, 6,000, 8,000, 13,000 and 12,000 tons per day respectively. But this does not indicate the current actual production, only their capacity.
Even though the government had plans to construct and commence production of ten new sugar factories during the first GTP (2010-2015), almost all of its projections failed.
In the past year Tendaho and Kesem which commenced over a decade ago and Kuraz 2, which was constructed by the Chinese company have been finished.
Most of the others were managed by MetEC a state industry developer. Some of these have been delayed of have performed weakly. The government has stated that sugar would be a major source of hard currency, but that has failed to materialize.
Globally the sugar industry has been in turmoil since the EU scrapped production and export quotas in 2017, prompting many producers to boost output just as sugar prices collapsed under pressure from large world stocks.