The government has announced a temporary closure of all sugar milling operations in the Upper and Lower Western regions for a period of three months, beginning July 11, 2025.
The directive comes as the newly enacted Sugar Development Levy (SDL) takes effect, marking a coordinated strategy to rebuild the sector and phase out sugar imports by 2027.
According to the Kenya Sugar Board (KSB), targeted millers include 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.
KSB Chief Executive Officer Jude Chesire said the decision was reached after a stakeholder consultative meeting held on July 4 in Kisumu, which confirmed an acute shortage of mature sugarcane in both regions.
“This suspension will allow sugarcane to mature and enable a reset in cane supply planning. We will also conduct a cane census within two months to better assess field readiness ahead of resuming operations,” said Chesire.
Chesire said the shortage which is attributed to inadequate cane development planning has led to widespread harvesting of immature cane and a drastic decline in sugar production in the first half of 2025.
The board has further directed all millers to intensify cane development to ensure a sustainable supply of raw materials going forward.
The Sugar Development Levy which came into effect on July 1, 2025 charges millers and sugar importers 4pc levy on the ex-factory price of locally produced sugar and the Cost, Insurance, and Freight (CIF) value of imported sugar.
“With the SDL in place and proper financing mechanisms, 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,” he said.
The Ministry of Agriculture appointment the Kenya Revenue Authority (KRA) has been appointed as the official collection agent, with all levies due by the 10th of each month following production or importation.
Additionally, the National Treasury has also approved the transfer of the Sugar Development Fund from the Commodity Fund to the Kenya Sugar Board, a move expected to enhance transparency, credit discipline, and effective sector reinvestment.
The board now projects SDL collection to exceed Ksh 5 billion annually.
Of this amount, 40pc equivalent to Ksh 2 billion will be allocated towards cane development programs and 15pc KSh 600 million) to rehabilitate roads in sugar zones.
Another estimated KSh 600 million will be allocated to cane research and innovation, with the same amount also being allocated to factory modernization.
5pc of the collected SDL will be channeled towards strengthening farmer institutions Vs with another 10pc going to administrative functions under the Kenya Sugar Board.
Additionally, from September 1, 2025, all loan repayments by stakeholders with active financing facilities will be remitted directly to the Sugar Board.
