NAIROBI — The government has ordered a three-month suspension of operations at five sugar mills in Kenya’s western region, effective July 11, citing a sharp shortage of mature cane and poor field planning.
The mills affected by the shutdown include Nzoia Sugar Company, Butali Sugar Mills, West Kenya Sugar Company (along with its Olepito and Naitiri units), Mumias Sugar (2021) Ltd, and Busia Sugar Industry Ltd. The decision was announced by the Kenya Sugar Board (KSB) following a high-level meeting with industry stakeholders on July 4 in Kisumu.
KSB CEO Jude Chesire said the move is aimed at allowing cane fields time to recover and maturing cycles to realign after months of premature harvesting and uncoordinated supply.
“This suspension will allow sugarcane to mature and enable a reset in cane supply planning,” Chesire said. “We will also conduct a national cane census within two months to gauge field readiness before milling resumes.”
Chesire confirmed that millers had been processing immature cane due to poor planning and inadequate crop development, leading to a significant drop in sugar output during the first half of the year.
To stabilize the industry, the board has directed all millers to scale up cane development efforts immediately.
The shutdown comes just days after the Sugar Development Levy (SDL) came into effect on July 1. Under the new law, sugar producers and importers will pay a 4% levy on either the ex-factory price of local sugar or the cost, insurance, and freight value of imported sugar.
According to Chesire, “With the SDL in place and proper financing, we are now on the right track. The failures of the past must not be repeated. This is the moment to reclaim the future of Kenya’s sugar industry.”
The Kenya Revenue Authority (KRA) has been appointed to collect the SDL, with all payments due by the 10th of each month following production or import.
In another major reform, the National Treasury has approved the transfer of the Sugar Development Fund from the Commodity Fund to the Kenya Sugar Board. Officials say this will improve transparency, ensure disciplined lending, and streamline reinvestment into the sector.
KSB projects that the SDL will raise Ksh 5 billion annually. The board outlined how the funds will be distributed:
- 40% (Ksh 2 billion) for cane development
- 15% (Ksh 600 million) for sugar belt road repairs
- 12% (Ksh 600 million) split equally between factory upgrades and cane research
- 5% for farmer institution support
- 10% for KSB administrative operations
Loan repayments for industry players with active credit lines will also be redirected to the Kenya Sugar Board starting September 1, 2025.
The government has committed to ending sugar imports by 2027 through a focus on local production and improved sector management. The current crisis, officials say, marks a pivotal moment in confronting long-standing inefficiencies and rebuilding a reliable supply chain.
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