NAIROBI, November 27, 2025 — Kenya’s sugar industry is facing mounting pressure as premature cane harvesting, weakened yields, and disruptive policy shifts threaten to pull national production sharply lower, according to a new Sugar Field Report distributed by the United States Department of Agriculture [USDA] in partnership with the Global Agricultural Information Network [GAIN].
The findings, posted from Nairobi, reveal that field visits conducted in August 2025 point to a significant shortage of mature cane across the western sugar belt. Mills in counties such as Kakamega, Bungoma, Busia and parts of Nyanza are being forced to slow or intermittently halt operations. Reduced harvested area, lower extraction rates, and persistently weak yields have added further strain.
At the policy level, government-ordered mill closures, intended to allow cane fields time to recover, combined with the rollout of a new 4 per cent Sugar Development Levy, have increased costs and delays across the supply chain. While the levy aims to fund cane development, factory upgrades, and research, the report notes that it arrives at a time when domestic sugar prices are already rising due to tight supply.
Industry stakeholders told USDA analysts that production could fall by as much as 20 percent in calendar year 2025, potentially dropping below 815,485 metric tonnes.
Meanwhile, consumption is projected to reach 1.14 million tonnes, further widening Kenya’s supply deficit. As a result, sugar imports are expected to rise by nearly 5 per cent, particularly from COMESA and EAC countries benefiting from preferential duty structures.
Smallholders carry the sector — but yields lag
Sugarcane cultivation remains dominated by smallholder farmers, who grow 93 per cent of Kenya’s cane on plots of less than one hectare. Mill-owned estates account for the remaining 7 per cent. Beyond the traditional western and Lake Victoria Basin regions, investment is expanding into non-traditional cane-growing areas such as Tana River, Narok, Trans-Nzoia, and Kwale.
Despite favourable agro-ecological conditions, most Kenyan farms continue to produce far below their potential, averaging 40–60 tonnes per hectare—well under the 100 t/ha achieved in more competitive sugar-producing countries. The USDA report cautions that continued expansion of cultivated area without tackling low productivity limits the industry’s ability to meet rising domestic demand.
Imports rise as domestic output falters
Data from the Kenya National Bureau of Statistics confirms the country’s heavy reliance on imports to fill the widening supply gap. Kenya imported 339,137 tonnes of sugar in 2024, and by July 2025 had already brought in 258,775 tonnes—despite 2024 being a peak domestic production year.
The Kenyan Sugar Research Institute forecasts total sugar demand at 1.13 million tonnes for 2025, with imports expected to exceed 350,000 tonnes. Most will continue to come from COMESA and EAC suppliers, although the safeguard mechanism limits duty-free COMESA imports to 350,000 tonnes annually. Sugar imported from outside these blocs faces a 100 per cent tariff unless a government waiver is granted.
To support local manufacturers, the Government of Kenya has approved a temporary duty waiver allowing importation of 89,200 tonnes of industrial sugar over a 12-month period starting in late July 2025.
Prices continue to climb
Retail sugar prices are expected to rise at the start of the 2025/26 marketing year as supply tightens. Industry sources cited in the report indicate that sugar is currently selling for around KSh 172 [£1.05] per kilo, up from KSh 165 [£1.01] in 2024. Cane prices, set by an industry committee of government, growers, and millers, have stood at KSh 5,750 [£35] per tonne since July 2025.
Prices are expected to stabilise once new import shipments arrive.
Reforms under the sugar Act 2024
The report highlights the government’s commitment to restructuring the sector in line with the Sugar Act 2024 and the reinstated Sugar Development Levy. The reforms aim to boost cane productivity, modernise milling operations, strengthen research efforts, improve infrastructure in cane-growing zones, and deliver more effective support to farmers.
However, the report warns that without urgent productivity improvements and stronger coordination across the value chain, Kenya’s sugar industry will continue to face recurring cycles of shortage, rising prices, and growing import dependency.
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