Despite challenges faced by local distillers, Kenya has decided to lift the ban on molasses export, a move that has raised concerns within the local alcohol production industry. Local distillers have been grappling with molasses shortages, impacting their ability to produce ethanol. The government had initially imposed the export ban after a substantial amount of molasses was diverted to neighboring markets, leaving domestic distillers without a crucial ingredient for ethanol production.
Acting Director of the Sugar Directorate, Jude Chesire, announced the suspension lift in a letter to all sugar millers, citing the completion of a verification exercise revealing excess molasses held by millers. The resumption of molasses exports is effective for 45 days from February 6, 2024, subject to review.
Chesire stressed the importance of prioritizing local distillers and farmers for domestic use. Traditionally, 80% of locally produced molasses is allocated to distillers, 10% to farmers, and the remaining 10% is exported. However, local distillers expressed dissatisfaction, claiming that they still face a molasses shortage, exacerbated by illegal exports.
Mohan Galot, Chairman of London Distillers, a major player in the industry, voiced concerns about the decision's impact on production, stating, “The lifting of the ban is in bad taste and will certainly affect our production. The supply of molasses has not improved, and we are still paying a high price for it.”
The shortage has led to operational challenges for distillers, with Agro-Chemical and Food Company Limited (ACFC) having to suspend operations due to limited molasses supply. Kibos, a Kisumu-based sugar miller, is also facing challenges.
The price of molasses surged almost tenfold from July 2022 to October 2023, reaching Sh50,000 per tonne, attributed to illegal exports diverting a significant portion of the raw material to Uganda. Distillers continue to grapple with the repercussions of the shortage, impacting the cost of production for spirits like wine, gin, and whisky.
