Government Lowers Minimum Sugarcane Price to KSh 5,500 Per Tonne as Production Rises

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. The directive, issued by the Kenya Sugar Board on April 24, 2026, instructs all millers to immediately implement the new price and ensure prompt payments to farmers.

The decision comes after deliberations by the 4th Interim Sugarcane Pricing Committee, which reviewed current market conditions and consulted key industry players. The revision reflects a changing landscape in Kenya’s sugar sector, where improved production has altered supply dynamics and pushed wholesale sugar prices downward.

Sources familiar with the discussions indicated that some millers had pushed for the price to be reduced further to KSh 5,000 per tonne. These millers argued that rising production costs and falling sugar prices were squeezing their margins, making it difficult to sustain operations. However, after careful consideration, the government settled on the KSh 5,500 figure to protect farmers from a steep reduction while still responding to market forces.

Production surge drives price review

Kenya has recorded improved sugar production in 2026, with increased cane availability and higher factory output boosting sugar supply across the country. The reopening of four previously dormant state-owned sugar factories, which were leased to private operators, has further increased production volumes.

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. That would ultimately harm farmers as well, since struggling mills translate to delayed payments and reduced cane purchases.

Kenyan farmers still ahead regionally

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 regional comparison reinforces the government’s position that Kenyan farmers are not being exploited but are instead receiving some of the most competitive rates in East Africa.

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. The reform agenda has focused on improving governance at miller level, clearing farmer debts, and creating a more transparent pricing mechanism.

Balancing act between farmers and millers

The pricing committee’s deliberations highlight the delicate balance required in Kenya’s sugar industry. Farmers need predictable, fair prices to justify investing in cane production, which involves lengthy growing cycles and significant input costs. Millers, on the other hand, must remain profitable to keep factories running, pay farmers promptly, and maintain equipment.

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. While the KSh 250 per tonne reduction will be felt by growers, the government believes the compromise position protects the long-term health of the sector.

Millers have been directed to comply with the new pricing immediately, with the Kenya Sugar Board monitoring adherence. Farmers who believe they are being underpaid can report complaints through the board’s established channels.