Kenya raises sugarcane price latest boost for farmers, industry reforms 

KENYA – The Kenyan government has increased the minimum price of sugarcane to Kes 5,750 (US$44.50) per tonne, effective July 21, 2025, marking the second price hike this year. 

The adjustment, up from the previous Kes 5,500 (US$42.57) set in May, represents a cumulative increase of KSh500 or 9.5% since April. 

Agriculture Principal Secretary Dr. Kipronoh Ronoh announced the new rate following an analysis by the Interim Sugarcane Pricing Committee, which reviewed ex-factory sugar prices between April and June 2025.  

The new pricing aims to improve earnings for farmers and incentivize continued sugarcane cultivation amid rising operational costs. 

“This adjustment ensures fair compensation for farmers, reflecting rising market prices,” Ronoh stated in a directive to sugar millers.  

He urged the 15 licensed millers, including Kibos Sugar, Nzoia Sugar, Chemelil, Muhoroni, and Mumias Sugar, to comply fully and make timely payments to growers. 

According to the Ministry of Agriculture, the higher price is expected to provide increased income for farmers, enhancing financial security and reducing the likelihood of farmers shifting to more profitable crops. The formula used to determine the price takes into account cane weight and market sugar prices. 

However, the rise in sugarcane prices means millers will bear higher input costs, potentially affecting production expenses and profit margins if market prices do not adjust accordingly.  

The ministry pledged to closely monitor compliance with the pricing directive and continue regular reviews to ensure equity in the sector. 

The price hike comes shortly after the implementation of a 4% Sugar Levy applied to both local and imported sugar.  

For locally produced sugar, the levy is based on the ex-factory price, while for imported sugar it is calculated on the Cost, Insurance, and Freight (CIF) value. All sugar producers and importers must remit the levy by the 10th day of the month following the transaction. 

Additionally, as part of the sugar reforms, the government completed the leasing of four state-owned mills to private firms in a bid to revive the ailing sugar industry.  

The four mills, Nzoia, Chemelil, Sony, and Muhoroni, will be leased for 30 years to West Kenya Sugar Company, Kibos Sugar & Allied Industries, Busia Sugar Industry, and West Valley Sugar Company, respectively. 

At the time, Agriculture CS Mutahi Kagwe noted, “These changes aim to make the sugar sector sustainable while improving livelihoods in western Kenya.” 

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