Sugar prices are soaring in Kenya, causing widespread concerns among consumers and local businesses as sugar is one of the most affordable calories sources in the African country.
Kakamega in western Kenya is a prominent sugarcane-producing area. The below-average rainfall there and escalating costs of agricultural inputs this year resulted in a poor sugarcane harvest, forcing local sugar factories to temporarily shut down and leaving farmers waiting longer for their deliveries.
The insufficient domestic sugar production makes Kenya rely on sugar imports. However, a scarcity of U.S. dollars, partly caused by the U.S. Federal Reserve’s interest rate policies, and the rising costs of transportation and fuel have jointly brought up sugar prices, with the price of a 2kg pack of sugar surging by 130 percent since the beginning of this year.
“My small hotel relies on selling tea and other beverages to make a living, but the continuous rise in sugar prices has affected our business. If this continues, I might have to close down because the situation is very challenging,” said a local hotel operator Vivian Achieng.
The sugar sector in Kenya supports up to 8 million Kenyans and 400,000 small-scale farmers who produce more than 90% of the cane required by the milling plants in the country.
According to figures from the sugar directorate, a 50 kg bag of sugar was fetching a wholesale price of Ksh.6,844 in December 2022, translating to Ksh.137 per kilo (wholesale rate) and Ksh.155 per kilo-retail rate.
In September 2023, this has risen to Ksh.9,252 per 50 kg bag (wholesale, Ksh.185 per kg), and Ksh.240 per kg retail.
According to the Food and Agriculture Organization of the United Nations, the World Food Price Index for September reported a 9.8 percent month-on-month increase in the sugar price index, marking the second consecutive month of price hikes and reaching the highest level in 13 years.
The surge price hike has affected several other African nations, including Rwanda, Tanzania, South Africa and Nigeria, with sugar price increases ranging from 20 to 50 percent.