The Kenyan government has adjusted the minimum price paid to sugarcane farmers downward from Ksh5,750 to Ksh5,500 per tonne, in a move intended to balance grower incomes with the financial health of millers as domestic sugar output continues to climb.
In a directive issued by the Kenya Sugar Board on April 24, all licensed millers have been ordered to adopt the new rate immediately and to ensure timely payments to farmers.
The revision follows deliberations by the 4th Interim Sugarcane Pricing Committee, which examined current market conditions, including higher cane availability and elevated factory output, after the government reopened and leased four previously dormant state-owned sugar factories to private operators.
Sources close to the discussions said some millers had argued for a steeper cut, down to Ksh5,000 per tonne, citing squeezed margins from higher operational costs and declining sugar prices.
The government, however, opted for a more moderate reduction to shield farmers from a sharper drop while acknowledging shifting market realities.
With greater supply, market dynamics have driven down sugar prices. A 50-kilogram bag of sugar now sells for roughly 6,000 to 6,100 shillings at retail, down from about 7,000 shillings earlier, according to industry figures.
But even at the revised rate, Kenyan farmers continue to receive some of the more competitive payments in the region. For comparison, growers in Tanzania earn roughly Ksh4,900 per tonne, while those in Uganda receive about Ksh4,500.
The price review forms part of broader reforms in the sugar sector led by Agriculture Cabinet Secretary Mutahi Kagwe. Officials describe the changes as essential to revitalising mills, improving efficiency, and creating a more sustainable industry that fairly rewards farmers, keeps factories running, and gradually reduces Kenya’s dependence on imported sugar.
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