November 29, 2016 / 2:55 PM / 8 months ago

Dollar shortage to cut Sudan's white sugar imports - sugar official

2 Min Read

LONDON, Nov 29 (Reuters) - White sugar imports into Sudan are set to drop in the coming year as higher prices and a hard currency crunch hit demand, a Sudanese sugar industry official said on Tuesday.

Sudan's economy has struggled since South Sudan seceded in 2011, taking with it three-quarters of the country's oil output, a key source of foreign currency and government revenue.

A dollar shortage and a ballooning black market for hard currency has made imports more costly, raising prices generally. Annual inflation stood at almost 20 percent in October.

"Sugar imports this year will be scaled down critically," Hassan Hashim Erwa, corporate director sales & marketing with Sudan's top domestic plant Kenana Sugar Company (KSC), told Reuters on the sidelines of the International Sugar Organization's annual seminar in London.

The dollar shortage had hit real incomes, reducing sugar demand, he added.

White sugar imports were expected to drop to between 700,000 to 800,000 tonnes in 2016/17, he added, down from 1 million tonnes in 2015/16 and 1.4 million tonnes in 2014/15.

In recent years up to 30 percent of white sugar imports into Sudan were estimated to have been re-exported to neighbouring countries including Chad, Central African Republic and Mali, Erwa said. But demand for re-exported sugar was also likely to fall due to conflicts in the region.

Sudan introduced austerity measures in recent weeks aimed at reducing government spending. It has partially removed fuel and electricity subsidies and imposed import restrictions, while raising tariffs.

The price of a kilo of sugar has more than doubled to 15 Sudanese pounds ($2.31) from a year ago.

KSC's biggest shareholders are the Sudanese government with 35.33 percent, the Kuwait Investment Authority with 30.64 percent and the government of Saudi Arabia with 10.97 percent, according to the firm's Web site.

$1 = 6.4800 Sudanese pounds Editing by Alexandra Hudson

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