Tears as Govt reduces sugar cane prices to Sh5,500 per tonne

The government has revised the minimum price per tonne of sugar cane delivered to sugar factories in the country by farmers from Shs5,750 to Shs5,500.

In a notice by Kenya Sugar Board (KSB) on Friday, the move was taken after deliberations that reviewed the current market conditions that included responding to changing market dynamics.

The Board said this is part of wider reforms being undertaken by the ministry of agriculture aimed at reviving the sugar sub-sector, strengthen miller operations and ensure long-term sustainability for both farmers and investors.

The decision by the Board’s Sugarcane Pricing Committee signals a reduction by Shs250 per tonne of cane delivered to millers from the current Shs 5,750.

Millers countrywide have hence been instructed to implement the new price forthwith and ensure prompt payment of farmers.

According to KSB, the move was taken after extensive consultation that focused on balancing farmer earnings and prevailing market realities as sugar production rised across the country.

The review comes as the sub-sector recorded improved sugar production this year occasioned by increased cane availability and
higher factory output that has boosted sugar supply in the market.

Rising production of the sweetener had triggered market forces of demand and supply hence pushing the prices down.

Consequently, a 50Kg bag of sugar that was retailing at approximate Shs 7, 000 that informed the current price per tonne of Shs 5, 750 has now fallen to Shs 6, 000 and Shs 6, 100.

This forced a review of raw materials costs to ensure the industry remains viable, the Board said.