Kenya Lowers Sugarcane Price to KSh 5,500 per Tonne in Sector Balancing Move

The Kenyan government has revised the minimum sugarcane price from KSh 5,750 to KSh 5,500 per tonne, in a move aimed at balancing the interests of farmers and millers amid shifting market dynamics.

In a directive issued on April 24, 2026 by the Kenya Sugar Board, all millers were instructed to immediately adopt the new pricing structure and ensure timely payments to farmers.

The adjustment follows deliberations by the 4th Interim Sugarcane Pricing Committee, which reviewed prevailing market conditions and consulted stakeholders across the sugar value chain. According to sources familiar with the discussions, some millers had proposed a steeper reduction to KSh 5,000 per tonne, citing rising production costs and declining sugar prices. However, the government settled on a compromise figure to cushion farmers from a sharp income drop.

The price review comes at a time when Kenya is experiencing increased sugar production in 2026, driven by improved cane supply and higher factory output. The reopening of four previously dormant state-owned sugar factories—now under private management—has further boosted local production, leading to an increase in sugar supply.

As a result, market forces have pushed retail sugar prices down. A 50-kilogram bag of sugar, which previously retailed at about KSh 7,000, now sells for between KSh 6,000 and KSh 6,100. This decline has necessitated a review of raw material costs to ensure millers remain operational.

Industry players warn that maintaining high cane prices amid falling sugar prices could strain millers financially, potentially threatening the sustainability of the sector.

Despite the reduction, Kenya continues to offer some of the most competitive sugarcane prices in the region. Farmers in Tanzania earn approximately KSh 4,900 per tonne, while those in Uganda receive about KSh 4,500 per tonne—figures significantly lower than Kenya’s revised rate.

The reforms are part of broader efforts led by Agriculture Cabinet Secretary Mutahi Kagwe to revitalize the sugar industry, enhance mill efficiency, and create a sustainable environment for both farmers and investors.

Government officials maintain that the long-term objective is to stabilize the sector, ensure fair earnings for farmers, keep factories running efficiently, and reduce the country’s reliance on sugar imports.