The Government of Kenya has ordered a temporary, three-month cessation of all sugar milling operations in the Upper and Lower Western regions, effective July 11, 2025.
This unprecedented directive, announced by the Kenya Sugar Board (KSB), aims to address a severe shortage of mature sugarcane and pave the way for a more sustainable future for the industry.
The shutdown, which will impact key millers including Nzoia Sugar Company, Butali Sugar Mills, West Kenya Sugar Company (and its Olepito and Naitiri units), Mumias Sugar (2021) Ltd, and Busia Sugar Industry Ltd, comes after a stakeholder consultative meeting on July 4 in Kisumu confirmed the dire state of cane supply.
Gov’t Orders 3 Month Shutdown of Western Sugar Mills Over Cane Shortage.
KSB Chief Executive Officer Jude Chesire highlighted that inadequate cane development planning has led to widespread harvesting of immature cane, causing significant losses for farmers due to lower yields and a drastic decline in sugar production in the first half of 2025.
This suspension is designed to allow existing sugarcane to mature and facilitate a comprehensive reset in cane supply planning.
The KSB plans to conduct a cane census within two months to accurately assess field readiness before operations resume. Millers have also been directed to intensify cane development efforts to ensure a consistent supply of raw materials moving forward.
Gov’t Orders 3 Month Shutdown of Western Sugar Mills Over Cane Shortage
The temporary closure coincides with the implementation of the new Sugar Development Levy (SDL), which took effect on July 1, 2025.
The levy charges millers and importers 4% on the ex-factory price of locally produced sugar and the Cost, Insurance, and Freight (CIF) value of imported sugar. The Kenya Revenue Authority (KRA) has been appointed as the official collection agent, with all levies due by the 10th of each month.
The National Treasury has further approved the transfer of the Sugar Development Fund from the Commodity Fund to the KSB, a move expected to enhance transparency and credit discipline.
The KSB projects annual SDL collection to exceed Ksh 5 billion, with significant portions allocated to cane development programs (40%), road rehabilitation in sugar zones (15%), cane research and innovation (15%), and factory modernization (15%).
This strategic financial injection, coupled with the operational pause, is a coordinated effort to rebuild the sector and achieve the ambitious goal of phasing out sugar imports by 2027.
