Commerce

Relief for consumers as prices of food, oil continue to cool down

Friday, August 12th, 2022 05:15 | By

The cost of living is expected to decline beginning this month as prices of food and crude oil continue to ease to the relief of consumers, companies and even political actors during this period.

Central Bank of Kenya’s (CBK) latest survey, the costs of foodstuff have continued to decline since June with dry maize prices expected to fall further, due to improved supply and imports.

“The survey revealed that prices of some food items particularly cabbages, tomatoes, onions, potatoes and green maize have declined since June due to improved supply,” CBK said in a report by its Monetary Policy Committee.

“Respondents expect the supply of green maize and wheat to increase from August with the harvest season while the supply of dry maize is expected to increase due to imports,” the survey says.

Kenya’s food basket is gearing up for harvests in parts of Nyanza, South Rift and Western which will come as a reprieve to consumers as the expected harvest is set to stabilise maize supply in the country.

The harvest coupled, with cheaper produce from neighbouring countries is expected to reduce the price of the 90Kg bag from an estimated Sh6,000 currently. On average in the past few years, farmers have been selling their produce at between Sh2,700 and Sh3,100.

On the other hand, prices of cabbages, tomatoes, onions, potatoes, and green maize had declined with the dip in prices of an onion being on account of imports from Tanzania.

The monthly inflation data by the Kenya National Bureau of Statistics (KNBS) shows the overall inflation rate in July was 8.3 per cent compared to 7.9 per cent in June.

Basket of goods

This is the Consumer Price Index (CPI), which measures the percentage change in the price of a basket of goods and services consumed by households, increased by 0.7 per cent from an index of 124.22 in June 2022 to 125.05 in July 2022.

At the same time, oil prices have come back to earth after soaring in the wake of Russia’s invasion of Ukraine, to the relief of politicians, manufacturers, and transporters everywhere including Kenya.

Crude oil has fallen 28 per cent since its most recent highs in early June, to trade at around $90 a barrel Wednesday.

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