Commodity Prices to Continue Rising as Supply of Fresh and Dry Foods Decline

Tough times beckon for households across the country as commodity prices are expected to continue rising amidst declines in the supply of fresh and dry items.

The dire situation carries on eroding the purchasing power of consumers and hampering their standards of living.

Experts have predicted that in the coming months, unga (maize flour) prices will go up even further than the prices registered across the country in the same period in 2017.

The government continues to hold the premise that the country has enough maize stock that will sustain its citizens for the coming months until July, but the delayed rains, the prolonged drought, and the elevated commodity prices have rendered some Kenyans unable to buy products.

According to Mwangi Kiunjuri, the Cabinet Secretary for Agriculture, Kenya millers, farmers, traders, processors, and the National Cereal and Produce Board (NCPB) hold 21.3 million bags of maize.

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“Farmers have in their stores 13 million shillings of 90kgs bags of maize, 3.3 million held by traders, millers, and processors have 680,588 bags and 4.3 million is in NCPB,” Kiunjuri said in April.

He also noted that the consumption per month stood at 4.2 million bags of 90kgs bag of maize with other alternative uses like livestock feed and industrial processing factored in.

Food Prices

Currently, the prices of commodities like Sukuma wiki, tomatoes, cabbage, peas, carrots among other fresh produce are so steep not to mention being incredibly low in supply.

Reports indicate that cabbages are retailing between 80 and 100 shillings whereas one tomato goes for between 10 and 15 shillings.

In two weeks, commodity prices in supermarkets and open-air markets have risen by over 10 percent. A 2kg packet of maize flour in supermarkets averaged 90 and 95 shillings two weeks ago, but after the millers adjusted their prices by more than 20 percent, the prices jumped to between 117 and 120 shillings. The prices are even higher in other estates and urban centers.

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In calculations, the new prices represent a 34 percent rise as opposed to the prices registered in February 2019, where maize flour averaged 85 and 90 shillings. The low prices were attributed to a bumper harvest and an increase in the supply of maize.

Last week, the United Grain Millers Association issued a warning that by the end of April 2019, maize flour prices will likely hit 130 shillings or more due to a continued decrease in supply.

Meanwhile, it has been stated that the maize shortage is due to farmers refusing to sell their maize to the government and opting for traders and dealers who export the produce.

Maize dealers are exporting the produce to countries like South Sudan where a 90kg bag of maize goes for 6000 shillings compared to the retail price of between 2,700 and 3,500 shillings locally.

“We are operating below capacity in our mills and if the situation continues like this, some of us will close down and thus result in more challenges. The government needs to reach out to all the stakeholders to devise ways to boost supply in the local market,” said Peter Kuguru, the chairman of the Association.

Inflation

Households will now be forced to adjust their budgets to fit the high inflation rate that has been triggered.

In the last two months, inflation has risen by 2.6 percent all thanks to the prolonged dry spell and low supply of food commodities in the country.

Read Prolonged Drought Hurting Kenyan Households as Commodity Prices Heighten