Kenya's Sugar Industry: The Sweet and Bitter Story of Sugarcane Farming and Milling

Kenya's sugar industry supports over six million livelihoods in western Kenya but has been plagued by decades of mismanagement, political interference, and chronic inefficiency. In 2024, domestic production surged to 815,485 metric tonnes—the highest in years—only for output to plummet 27 per cent in the first eleven months of 2025 amid factory disruptions, premature harvesting, and cane shortages. With the government now leasing four state-owned mills to private operators on 30-year terms and raising cane prices to KES 5,750 per tonne, the industry stands at a turning point that will determine whether Kenya can finally achieve sugar self-sufficiency or remain dependent on costly imports.

The Scale and Importance of Sugar in Kenya

Sugar is one of Kenya's most politically sensitive agricultural commodities, central to the livelihoods of an estimated six million people across the western sugar belt spanning Kakamega, Bungoma, Vihiga, Busia, Kisumu, Homa Bay, Migori, Nandi, and Kericho counties. The crop is grown predominantly by smallholder farmers on plots averaging 1 to 3 acres, making the industry one of Kenya's most significant sources of rural employment and income in these regions.

Kenya consumes approximately 1.1 million metric tonnes of sugar annually—far exceeding domestic production capacity—necessitating substantial imports to bridge the deficit. The gap between production and consumption has historically been filled through imports from COMESA member states under the regional trade agreement, as well as from global suppliers. In a landmark move, Kenya dissolved its COMESA sugar safeguard barriers in 2024 after maintaining protections for 24 years, exposing the domestic industry to full regional competition.

Production Statistics and Recent Trends

According to the USDA Foreign Agricultural Service, Kenya's sugar production reached 815,485 metric tonnes in 2024/25, a remarkable achievement driven by government policies that discouraged premature harvesting and improved farmer access to inputs. However, this peak was short-lived—production is forecast to drop 19.8 per cent to 650,000 metric tonnes in 2025/26 due to reductions in harvested area and lower sugar extraction rates at mills.

The decline has been stark. In the first eleven months of 2025, domestic output fell to 551,805 tonnes—a 27.2 per cent decrease compared to the same period the previous year. Premature cane harvesting, where farmers sell immature cane for quick income, has created acute shortages of mature cane, forcing many mills in western Kenya to scale back operations or shut down intermittently. This cyclical pattern of boom and bust has long plagued the industry, undermining planning and investment.

To offset the local supply deficit, sugar imports surged by 38 per cent. In the first seven months of 2025 alone, imports reached 258,775 tonnes—underscoring the sector's continued structural dependence on foreign sugar despite decades of government intervention and protection.

Kenya's Sugar Mills: State-Owned and Private

Kenya's sugar industry comprises both state-owned and private milling operations. The major public mills historically include Mumias Sugar Company (once East Africa's largest sugar producer), Nzoia Sugar Company, Chemelil Sugar Company, Sony Sugar Company, Muhoroni Sugar Company, and Miwani Sugar Company. Most of these state-owned mills descended into financial crisis due to mismanagement, corruption, political interference in appointments and procurement, and the accumulation of massive debts owed to cane farmers, workers, and creditors.

Private mills have generally performed better. West Kenya Sugar Company in Kakamega, Kibos Sugar and Allied Industries in Kisumu, and Butali Sugar Mills in Kakamega operate profitably and have expanded capacity through reinvestment. These private operators have demonstrated that efficient management, timely farmer payments, and investment in factory maintenance can make sugar production commercially viable in Kenya.

Mumias Sugar Company—once the industry's flagship—epitomises the sector's challenges. At its peak, Mumias processed over 250,000 tonnes of sugar annually. By the 2010s, a combination of governance failures, diversification into unprofitable ventures, mounting debt, and competition from private mills led to near-total collapse. The company was placed under receivership, and efforts to revive it through leasing arrangements have had mixed results.

The Leasing Model: Privatization by Another Name

After court cases and political opposition derailed outright privatization of state-owned mills, the government adopted a leasing model as an alternative. Four major public mills—Nzoia, Chemelil, Sony, and Muhoroni—have been leased to private investors on 30-year terms. Nzoia was leased to West Kenya Sugar Company, Chemelil to Kibos Sugar and Allied Industries, Sony to Busia Sugar Industry, and Muhoroni to West Valley Sugar Company.

Early results from the leasing programme have been encouraging. At Nzoia Sugar, Speaker of the National Assembly Moses Wetangula noted in February 2026 that privatization had revived the factory and was enabling timely payments to farmers—a critical issue given the decades-long history of delayed payments that drove many farmers out of cane cultivation. The leasing arrangement aims to inject private sector efficiency, capital, and management expertise while preserving the public interest in employment and farmer welfare.

Farmer Challenges and Government Support

Sugarcane farmers in Kenya have endured chronic hardships including delayed harvesting (with cane sometimes left standing for years beyond optimal maturity), delayed payments stretching months or even years, high input costs, poor quality planting material, and limited access to credit. These challenges drove widespread abandonment of cane farming in favour of alternative crops, contributing to the raw material shortages that now constrain factory operations.

The government has taken several steps to improve farmer welfare. The minimum sugarcane price has been raised progressively—from KES 5,250 to KES 5,500 per tonne in May 2025, and further to KES 5,750 per tonne shortly after. A proposed Sugar Bill currently before Parliament introduces provisions for equitable pricing mechanisms, fair appropriation of proceeds from sugar byproducts between millers and farmers, and establishment of a Sugar Tribunal to mediate disputes relating to cane pricing and contract farming.

The Sugar Development Levy and Industry Regulation

A new four per cent Sugar Development Levy has been introduced to fund cane development, factory modernisation, and research. While intended to support long-term industry growth, the levy adds cost pressure across the value chain at a time when sugar prices are already rising due to limited supply. The Agriculture and Food Authority (AFA) through its Sugar Directorate regulates the industry, overseeing production, marketing, and farmer-miller relations.

The Path to Sugar Self-Sufficiency

Achieving sugar self-sufficiency remains Kenya's elusive goal. The country's favourable climate and fertile soils in western Kenya can support significantly higher production if the structural challenges are addressed. Key requirements include ensuring the leased mills operate efficiently and pay farmers promptly, expanding cane acreage through farmer incentives and access to credit, investing in improved cane varieties and agronomic practices, and preventing the premature harvesting that has undermined recent production gains.

The dissolution of COMESA sugar safeguards adds urgency to these efforts. Without trade protections, Kenya's sugar industry must become competitive against regional producers or face displacement by cheaper imports. The combination of privatized management, improved farmer prices, and regulatory reform represents Kenya's best chance of building a sustainable, self-sufficient sugar sector that serves both producers and consumers.