CAIRO, Dec 20 (Reuters) - The Egyptian government has increased the price it pays local farmers for sugar cane by 25 percent, the Ministry of Supplies said on Tuesday.

Sugar companies belonging to the Ministry of Supplies will buy local sugar cane from farmers for 500 Egyptian pounds ($26.11) per tonne, up from 400 pounds in the last season, the statement said.

Sugar has become scarce in recent months and the government took control of stocks to counter what it said was an epidemic of hoarding by merchants reacting to rising prices amid a shortage of foreign currency.

Egypt consumes 3 million tonnes of sugar a year but produces just over 2 million tonnes, with the gap filled by government and private imports usually purchased between July and October.

The Supply Ministry raided sugar factories nationwide in August and seized 250,000 tonnes - most of the reserves held by the private sector - to secure supplies for its subsidised food outlets after failing to procure its usual shipments on time.

($1 = 19.1500 Egyptian pounds)

(Reporting by Ehab Farouk; Writing by Asma Alsharif; Editing by Louise Heavens)