New report warns of a looming sugar shortage in Kenya
The agency, through its Foreign Agriculture Service (FAS) division, says the country faces a 19.8 percent drop in sugar production to 650,000 metric tonnes in the 2025/2026 marketing year (MY), from 810,000 metric tonnes in the 2024/2025 marketing year.
A marketing year is a period designated for reporting and analysis of production, marketing and disposition of a commodity.
The agency, in its latest Sugar Annual report for Kenya dated April 18, 2025, forecasts that Kenya's sugar retail prices will increase as supply tightens due to closure of local mills for annual maintenance, but will stabilise when imports start coming in.
In January this year, the local sugar market saw pressure on prices, as ex-factory prices increased by five percent, rising to Ksh6,569 ($50.92) per 50kg bag from Ksh6,233 ($48.31) in December 2024.
Wholesale prices rose nine percent to Ksh7,177 ($55.63) per 50kg bag while retail prices climbed to an average of Ksh157 ($1.21) per kilogramme, from Ksh149 ($1.15) per kilogramme in December.
Currently, cane price is set at Ksh 5,300 ($41.08) per metric tonne.
According to the US agency, Kenya's area under cane harvesting is expected to drop to 150,000 hectares in the 2025/2026 marketing year, from 190,000 ha, due to a lower proportion of mature plantations, which resulted from overly aggressive harvesting in the 2024/25 year.
Kenya's main cane-growing regions are in the Western and Lake Victoria Basin region, with about 93 percent of the cane produced by some 320,000 small-scale farmers, on less than one-hectare individual holdings, while large plantations that are owned by millers produce the remaining seven percent.
According to the Kenya's Sugar Research Institute, cane yields range between 50 metric tonnes to 70 metric tonnes per hectare, due to regional variability, including weather conditions, crop husbandry practices, and cane varieties.
But, in the 2024/2025 period, the average cane yield decreased substantially to 51 metric tonnes per hectare from 56 metric tonnes per hectare in the previous year, due to dry weather conditions that preceded harvesting in some of the cane growing regions.
The agency says this year (2025/2025) millers would have to scramble for cane to utilise their installed capacity amidst increasing cane shortages.
In 2024, Kenya's retail sugar prices averaged Ksh138 ($1.06) per kilogramme, down from Ksh197 ($1.52) in 2023, prompting the government to ban sugar imports from the Common Market for Eastern and Southern Africa (Comesa) and East African Community (EAC) trading blocs.
Read: Kenya bans sugar imports from outside Comesa, EAC trade blocsNow sugar imports are expected to increase 37.93 percent to 600,000 metric tonnes in the current marketing year (2025/2026), from 435,000 metric tonnes in the 2024/25 period to offset the supply deficit.'Sugar consumption is anticipated to increase 1.6 percent to 1.25 million, due to rise use in households and in the hospitality sector, driven by higher disposable incomes, and the growth in the hospitality sector,' the report says.'Sugar imports are also expected to surge by 38 percent, to offset the anticipated local supply deficit. Imports are expected to come from the Comesa and EAC countries because of tariff advantages.'Duty-free imports from the Comesa countries are however subject to a limit of 350,000 metric tonnes per year, due to a safeguard that has been granted to Kenya.
The safeguard, which has been in force since 2002, was extended by two years in November 2023 and expected to expire in November this year.
Sugar imports from non-Comesa and EAC countries face a 100 percent tariff, unless a specific waiver is granted by the government of Kenya.
In September 2024, Kenya imposed a ban on sugar imports from outside Comesa and EAC, citing an increase in local production, with the country expected to produce more than 800,000 metric tonnes in the year.
The 2023 had been an unusual year, beginning with a severe drought that led to reduced sugar output, necessitating significant imports to bridge the supply gap.
The average annual consumption of table sugar in Kenya is about 950,000 metric tonnes, with the shortfall covered by imports from Comesa and EAC under existing trade protocols.
Under the EAC revised four band Common External Tariff structure that came into force on July 1, 2022, sugar is among items considered to be 'sensitive' and which attract higher duty of above 35 percent to protect local industries from competition.
Kenya's cane marketing is currently undertaken through 17 operational mills, four of which are government-owned, with total installed capacity of about 1.7 million tonnes.
State-owned mills' market share, estimated at eight percent, has been dwindling due to technological and operational inefficiencies, including obsolete milling technology, mismanagement, high debt portfolios, and the collapse of cane development programmes.
Private millers have been expanding their market share by investing in modern cane processing equipment and prompt pay to farmers.
Some of the private millers have also invested in cane development programmes that include input supply and extension services to their contracted farmers.
Average sugar extraction rates are also higher in private mills at 10 percent, compared to 5.6 percent in government-owned mills.
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