By John Kyule, Kenya Sugar Board
A Tumultuous Month for Kenya’s Sugar Industry
April 2025 proved to be a turning point for the Kenyan sugar sector, with industry data revealing sharp declines across key performance indicators. As documented in this month’s Kenya Sugar Board newsletter, the sector grappled with significant production setbacks, tightening supplies, surging import volumes, and shifting price dynamics at every stage of the value chain.
Steep Declines in Production and Supply
The month’s most dramatic trend was the substantial reduction in sugarcane milling and sugar output. Total cane milled plummeted by 44% compared to March, dropping to under 400,000 MT. This decline was broad-based, with only Olepito and Busia Mills bucking the trend, as KISCOL, West Valley, and Muhoroni remained closed. As a result, sugar production also fell sharply—down 46% from March—mirrored by similar drops in sugar sales and factory stocks.
The contraction extended to by-products, with molasses production and sales both registering significant declines. Molasses prices, however, rose to a new monthly average, highlighting demand resilience despite limited supply.
Rising Prices Amidst Tight Market Conditions
These supply shocks reverberated through the market, pushing prices higher at almost every stage:
-
Ex-factory sugar prices rose by 7% to a monthly average of Ksh 6,791 per 50kg bag, with prices increasing steadily throughout April and closing at Ksh 7,200.
-
Wholesale prices followed suit, up 5% to Ksh 7,246 per 50kg bag on average, with both local and imported sugars widely available.
-
Retail prices also climbed, averaging Ksh 160 per kilo—a 4% jump from March—with branded sugar trading at a premium.
Cane prices, however, remained pegged at Ksh 5,300 per tonne, following the previous committee revision in February.
Imports Soar as Domestic Shortfalls Widen
With local output constrained, Kenya’s reliance on foreign sugar deepened. April saw sugar imports surge by 23% to over 45,000 MT, mainly sourced from Uganda, Mauritius, Egypt, and a mix of COMESA and non-COMESA suppliers. The cost of these imports also edged higher, reflecting global price trends and shifts in supplier mixes.
Exports, in contrast, dwindled to negligible levels, with both sugar and molasses volumes sharply lower, reinforcing Kenya’s status as a net sugar importer.
Global Market: Softer Prices, Uncertain Prospects
Internationally, sugar prices weakened on the back of shifting policies and the start of the Brazilian harvest, though global production deficits remain in view for the upcoming seasons. Molasses markets also exhibited volatility, with European prices diverging based on supply and crop dynamics.
Outlook: Navigating Through Volatility
April’s figures underscore the volatility confronting Kenya’s sugar sector. As domestic production falters, the market is increasingly shaped by import trends and fluctuating global prices. For farmers, millers, traders, and policy-makers, these developments call for agility, strategic planning, and a renewed focus on long-term sustainability.
You can download this from Resources -> Monthly Newsletters