Kenyans may soon face higher sugar prices as local production slumps and new tax policies take effect, a new report by the United States Department of Agriculture (USDA) has warned.
The report, Sugar Annual, forecasts a retail price hike at the beginning of the 2025/26 manufacturing year, citing a 19.8% drop in local production due to mill closures, premature cane harvesting, and adverse weather conditions.
Sugar production is expected to fall to 650,000 metric tons, down from 810,000 metric tons the previous year.
Spot checks across supermarkets reveal a 2kg packet of sugar is currently retailing at between KSh 315 and KSh 350, with a kilo going for KSh 150 to KSh 165.
While the USDA expects prices to stabilise once imports resume, importation will come at a higher cost.
The Tax Laws (Amendment) Act 2024 raised excise duty on imported sugar from KSh 5 to KSh 7.5 per kilo.
Additionally, the Sugar Act 2024 introduced a 4% sugar development levy on both local and imported sugar.
Compounding the issue is a projected increase in consumption by 1.6% to 1.25 million metric tons, forcing the country to raise sugar imports by 38% to fill the widening supply gap.
President William Ruto’s administration has defended the reforms, stating they will fund sector revival.
However, consumers are likely to feel the pinch, with prices expected to remain high through the first half of the new financial year.
