Business

Cost of foodstuff soars as inflation hits 4.9pc

Friday, November 1st, 2019 06:48 | By

The cost of living soared to 4.95 per cent in September from 3.83 per cent as Kenyans grappled with high prices of food and beverages.

Kenya National Bureau of Statistics (KNBS) director-general Zachary Mwangi said inflation was spiked by the cost of foodstuff which have a huge impact on the Consumer Price Index (CPI).

“For instance, in October 2019 prices of maize grain, maize flour-sifted and tomatoes increased by 5.82, 4.58 and 4.44 per cent, respectively,” said Mwangi.

CPI data indicates the prices of Irish potato, maize grain and sifted maize flour, beans, green grams, mangoes, tomatoes, potatoes, charcoal, kerosene and cigarettes increased last month.

This comes even as the Ministry of Agriculture raised concerns over maize flour production after granaries run out of commodity while mature crop is still stuck in farms due to the rains.

Dipping imports

In what points to a short-term shortage, the situation is further compounded by declining imports from Tanzania and Uganda, leading to a surge in prices of the commodity locally.

Agriculture Research Principal secretary  Hamadi Boga said unfortunately, various commodities are in short supply.

“Prices of various commodities mainly maize and beans have assumed a high trend which is depressing to the majority of Kenyans owing to reduced purchasing power. The ongoing short rains have interrupted harvesting of mature crop, especially grain basket regions,” said Boga.

Boga said the situation will be further complicated as annual production is expected to drop to 35 million bags which is a 20 per cent decrease compared to 44 million recorded in 2018.

He said due to delayed rains, area under maize declined to 1.5 million hectares, from two million ha in 2018.

A spot check in supermarkets within Nairobi and its environs in the last one week reveals that various maize flour brands were still retailing at between Sh120 and Sh135 for a two-kg packet.  Early this wek in Mombasa, a packet sold for as high as Sh140.

Millers  warned that the prices will soon increase beyond Sh140 for a 2-kg packet of unga as supplies from the early crop are not sufficient to sustain the country until November when harvests from the main crop start trickling in.

United Grain Millers Association Chairman (UGMA) Ken Nyaga claims supplies released into the market by the Strategic Food Reserve (SFR) are not only insufficient but are also of low grade.

According to market price information by the Ministry of Agriculture from various market segments, wholesale price of a 90 kg bag of dry white maize as at end of June reached Sh3,241 but increased by 6.7 per cent to Sh3,459 as at end of August.

The same has increased to Sh4,000, Sh3,800 and Sh3, 700 in Mombasa, Nairobi and Kisumu respectively.

Agriculture stakeholders warn that if the situation is not contained, the cost of 2-kg packet of maize flour could hit Sh144 as was the case in 2017.

Worsening situation

Caleb Mugendi, assistant manager at Cytonn Investment, however, says while the inflation rate remains within the government-set target of 2.5 and 7.5 per cent, it could rise further in November.

“The inflation for the month of November is likely to rise due to a decline in food production especially grain and flour, as well as milk,” he said. 

Statistics released yesterday from the KNBS show that the food and non-alcoholic drinks index increased by 0.48 per cent from 251.53 registered in September .

More on Business


ADVERTISEMENT

RECOMMENDED STORIES Business


ADVERTISEMENT