By John Kyule, Kenya Sugar Board
As the Kenyan sugar industry closed the first quarter of 2025, March proved to be a month of both challenge and resilience. The latest edition of the Kenya Sugar Board’s Sugar Market Newsletter reveals a period marked by reduced production, strong market demand, shifting price trends, and evolving trade dynamics.
Production and Supply Pressures:
Sugarcane milling and sugar production saw notable declines in March, with nearly all mills—except Butali and Transmara—recording reduced throughput. KISCOL’s continued closure contributed to this downward trend. Total sugar output fell 13%, reflecting tight supply conditions that have become more prominent since the start of the year.
By-Products and Market Adaptation:
Molasses production also dipped, mirroring the fall in cane processing. However, molasses sales defied production trends, rising sharply and underlining robust local demand. In contrast, there were no molasses exports during March, a stark change from the export surge in February, when Uganda and Tanzania were the main destinations.
Market Prices and Consumer Relief:
Cane prices held steady at the minimum set rate, but the sugar market itself showed mixed signals. Factory-gate prices softened slightly, wholesale prices edged up, and retail sugar prices fell modestly, providing some relief to consumers. Closing stocks dropped significantly, pointing to ongoing strong sales and rapid market absorption.
Trade and Global Perspective:
March saw a dramatic increase in sugar imports, more than quadrupling from February’s levels. This import surge helped bridge the widening gap between domestic production and market demand. Meanwhile, international sugar prices eased, mirroring the shifting dynamics in the global market.
In Summary:
March 2025 tested the resilience of Kenya’s sugar sector, balancing production shortfalls with increased imports and steady sales. The market continues to adapt, with price adjustments reflecting both local and global influences. As stakeholders look forward, these trends highlight the importance of strategic planning and responsive policy in securing the industry’s future.