Half of the farmers that supply Mumias Sugar Company with sugarcane have sought alternative millers because of delayed payments.
The loss of these cane farmers had added pressure to the struggling miller which owes farmers more than Sh600,000. The company is also grappling with limited cane supply which has stopped sugar production.
Nashon Aseka, Mumias chief executive said the number of cane farmers has dropped from 50,000 to 25,000.
“The number of farmers has come down to currently stand at about 25,000 from 50,000 previously,” Aseka said adding that the reduction in cane supply will affect the company further.
Mumias’ milling capacity is 8,000 tonnes of cane each day but it is presently operating with less than half its capacity.
The miller suspended sugar production two weeks ago because of inadequate sugarcane. However, Aseka said the miller is accumulating cane before operations resume. He also said Mumias is looking for private farmers to supply the deficit.
The suspension of sugar production has affected the company’s earnings from other sources of revenue. Furthermore, the company has stopped selling electricity to Kenya Power with ethanol production becoming inconsistent.
The miller reported a 33.22 percent drop in profit after tax for the six months to December to Sh1.95 billion.
In 2017, a shortage of sugarcane production led the government to import sugar to control its increasing cost.