By Joel Chacha/Kenya/Nairobi,
The government has revised the minimum sugarcane price from KSh 5,750 to KSh 5,500 per tonne, following extensive consultations aimed at balancing farmer earnings, miller sustainability and prevailing market realities as sugar production rises across the country
In a directive issued by the Kenya Sugar Board on April 24, 2026, all millers were instructed to immediately implement the new price and ensure prompt payments to farmers
The decision was reached after deliberations by the 4th Interim Sugarcane Pricing Committee, which reviewed current market conditions and consulted key industry players
Sources familiar with the discussions indicated that some millers had pushed for the price to be reduced further to KSh 5,000 per tonne, arguing that rising production costs and falling sugar prices were squeezing their margins
However, after careful consideration, the government settled on KSh 5,500 per tonne to protect farmers from a steep reduction while still responding to changing market dynamics
The review comes as Kenya records improved sugar production in 2026, with increased cane availability and higher factory output boosting sugar supply in the market
The reopening of four previously dormant state-owned sugar factories that were leased to private operators has further increased production, resulting in more sugar being supplied locally
With higher production, market forces of demand and supply have pushed sugar prices down
Previously, a 50kg bag of sugar was retailing at approximately KSh 7,000, which informed the earlier cane price of KSh 5,750 per tonne
Today, sugar prices have dropped to between KSh 6,000 and KSh 6,100, making it necessary to review raw material costs to ensure the industry remains viable
Industry stakeholders note that if the cost of procuring raw materials remains too high while sugar prices continue falling, millers could struggle to sustain operations
Even after the revision, Kenya still pays farmers significantly better than neighbouring countries
Farmers in Tanzania earn approximately KSh 4,900 per tonne, while those in Uganda receive about KSh 4,500 per tonne
The comparison reinforces the government’s position that Kenyan farmers are not being exploited but are instead receiving some of the most competitive rates in the region
The move is part of wider reforms being spearheaded by Agriculture Cabinet Secretary Sen Mutahi Kagwe to revive the sugar sector, strengthen mill operations and ensure long-term sustainability for both farmers and investors
Officials say the ultimate goal remains building a stable sugar industry where farmers earn fairly, factories remain operational and Kenya reduces reliance on sugar imports.
