Kenya's new sugar market dynamics

Kenya has officially liberalised its sugar market following the expiry of the COMESA Sugar Safeguard on November 30, 2025, marking the end of 24 years of restricted imports and tariff protection for local sugar producers.

The development signals a major shift in the country’s agricultural trade policy and introduces a new era of regional competition within the sugar industry.

With the safeguard lifted, sugar imports from COMESA member states can now enter Kenya duty-free, exposing domestic millers to heightened competition at a time when the country continues to face a structural production shortfall. Kenya’s annual sugar consumption is estimated at approximately 1.1 million metric tonnes, while domestic production has increased to 815,454 metric tonnes. This leaves a persistent supply gap of close to 300,000 metric tonnes, which will continue to be filled through imports.

Recent industry data indicates notable progress in local production capacity. Sugarcane acreage has expanded by 19.4 per cent to 289,631 hectares, contributing to a 76 per cent increase in output since 2022. Despite these gains, several sugar mills are still undergoing rehabilitation and capacity upgrades following the leasing of previously state-owned factories to private investors, limiting short-term competitiveness.

The Kenya Sugar Board (KSB) has confirmed that sugar imports will be sourced from both COMESA and non-COMESA markets to ensure price stability and adequate supply. The Board cited inconsistent surplus availability within the regional bloc as a key reason for maintaining diversified sourcing options.

Market analysts project that the end of the safeguard will exert downward pressure on domestic sugar prices, benefiting consumers but intensifying operational and pricing pressures on local millers who are yet to fully optimise efficiency and scale. The open market environment is expected to reward producers with lower production costs and stronger supply chains.

The sector also faces emerging climate-related risks. Forecast dry spells could negatively affect sugarcane yields in the short term, potentially widening the existing supply deficit and increasing reliance on imports.

Kenya initially sought the COMESA safeguard in 2001 under the COMESA Free Trade Area to allow time for critical sector reforms. The protection was extended eight times, with progress assessed against agreed performance benchmarks by the COMESA Council of Ministers. Regulators have assured stakeholders that import monitoring and market coordination will continue as the industry adapts to a fully liberalised regional sugar trade framework.