NAIROBI, Kenya — The Kenya Sugar Board has announced a reduction in the minimum sugarcane price from Sh5,750 to Sh5,500 per tonne, marking a Sh250 cut aimed at stabilising the country’s sugar sector.
In a directive issued on April 24, the board instructed all licensed millers to implement the revised price immediately and ensure prompt payments to farmers.
“This is therefore to notify you that a new sugarcane price of Sh5,500 per tonne has been approved, effective immediately. This new price is comparatively high in the region,” the directive stated.
The decision follows recommendations by the 4th Interim Sugarcane Pricing Committee, which reviewed market trends, production costs, and stakeholder submissions before settling on the new rate.
Balancing Farmers and Millers
The price adjustment reflects ongoing efforts by the government to strike a balance between protecting farmer incomes and ensuring millers remain operationally viable.
Sources familiar with the deliberations indicated that millers had proposed a deeper reduction to about Sh5,000 per tonne, citing rising operational costs and declining sugar prices. However, authorities opted for a moderated cut to cushion farmers from a steeper income drop.
Officials say the move is part of broader reforms led by Agriculture Cabinet Secretary Mutahi Kagwe to revive the sector and improve efficiency.
Impact of Falling Sugar Prices
The review comes amid increased sugar production in 2026, driven by improved cane supply and higher output from factories, including those recently revived through leasing to private operators.
As a result, market prices for sugar have declined. A 50-kilogram bag, which previously retailed at around Sh7,000, is now selling between Sh6,000 and Sh6,100.
Industry players argue that maintaining higher cane prices in the face of falling sugar prices would strain millers and disrupt supply chains.
“The new pricing structure is intended to align production costs with current market realities,” an official familiar with the policy said.
Regional Comparison
Despite the reduction, Kenyan farmers remain among the highest paid in the region. Growers in Tanzania earn about Sh4,900 per tonne, while those in Uganda receive approximately Sh4,500 per tonne.
The government has used this comparison to argue that the revised price remains competitive and supportive of local producers.
Reform Agenda
The pricing shift forms part of a wider restructuring of Kenya’s sugar industry, which has faced years of inefficiencies, debt, and declining productivity.
Reforms have focused on reopening dormant mills, attracting private investment, and improving governance across the value chain.
As the sector adjusts to the new pricing regime, stakeholders will be watching closely to assess its impact on farmer earnings, miller sustainability, and overall sugar supply in the months ahead.
