The State has now set the national average price of sugarcane delivered to millers at Sh5,000 per tonne for August, walking back on an earlier chopped rate of Sh4,950 and hoping to tame disquiet among farmers.
The new pay rate is however still lower than the Sh5,125 that farmers earned for a tonne of sugarcane supplied in June and remains the lowest since the start of the year. In February a tonne of sugarcane was priced at Sh6,100 which means that the cost of the raw material has fallen by 18.03 percent over the six months to August.
Agriculture Cabinet Secretary Andrew Karanja said the Sh5,000 price takes effect immediately. He did not specify for how long the price would remain applicable.
“The sugarcane pricing committee whose primary mandate is for setting and review of sugarcane prices held a meeting on August 21, 2024, at Kilimo House and approved a revised price of Sh5,000 per tonne of sugarcane from Sh4,950 per tonne,” he said in a statement.
This adjustment followed protests by farmers amid threats of boycott of supplies to the factories. The Kenya National Federation of Sugarcane Farmers and the Kenya Association of Sugarcane and Allied Products cautioned the State against lowering prices.
Cornelly Serem chairman of the Agriculture and Food Authority (AFA) has attributed the slump in sugarcane prices to a glut in the market due to ample rains received since last year and the State-backed fertiliser subsidy which sharply increased cane production.
“Last year, we were crushing about 17,000 tonnes in a month. Now, we are crushing about 80,000 tonnes monthly due to the availability of cane in the market,” Mr Serem said.
According to data from AFA, domestic production of sugar hit a high of 75,685 tonnes in June, which is more than double the 34,072 tonnes that were produced in the same month last year.
Mr Serem added that the cane glut has also been partially driven by the resumption of crushing by factories. The State had limited the crushing capacity of millers between July and November last year to allow immature cane to mature.
“Since we resumed crushing, the farmers started harvesting the cane that was maturing during the period when we had restricted millers to crush at half their capacity,” he said.
Kenya is considering exporting excess sugar produced by local millers, citing a stock glut in the market.
“We are in the process of submitting a formal request to Parliament to open exports of sugar. We are traditionally net importers of sugar but we are now in a unique position where we have a surplus,” Mr Serem said two weeks ago.
This is a uncommon move considering that Kenya has a long time relied on imports to plug a growing deficit in sugar production.
Kenya produces an estimated 800,000 tonnes of sugar annually but demand stands at about 1 million tonnes each year leaving a deficit of 200,000 tonnes.
The shortfall is usually plugged by duty-free importation of the commodity owing to multi-year safeguards from the Common Market for Eastern and Southern Africa.
