This is going to be a very short section since Kengtung has a very limited choice food-wise. Well, there is a wide choice of lunchtime eateries – most of which sell the ubiquitous Shan noodles – and some great tea shops in the markets with the usual snacks, but dinner is more problematic.
Most noodle shops close up in the evening and while there is the good Pann Gabar selling Chinese and Thai food a few kilometres out of town on the airport road, if you're staying in the centre you're limited to one of two Chinese restaurants, the Golden Banyan and Lod Htin Lu – and that's about it. Of the two, the latter has a rather dingy aspect, though food is slightly cheaper with main dishes around 2,000 or 2,500 kyat. The former is far more pleasantly laid out with an outside eating area under a giant – you guessed it – banyan tree and mains at around 3,000 kyat.
They both offer fairly classic Chinese fare with similar menus, though food is generally good in both. Golden Banyan is popular with tourists and locals but doesn't have many tables, so in high season you may even have to wait. Staff are friendly with English spoken and it's a good spot to meet other visitors, so you may find yourself eating, as many visitors do, in the Banyan every evening.
Most hotels are too small to have their own restaurants (apart from serving basic breakfasts), so the only other alternative is to head down to one of the bars around the lakeside which do serve food though less English is spoken and the choice is more limited -- the view is good though. These lakeside cafes are great for a sunset beer.