Price Of Bread To Increase By 6 Shillings Again

Kenyans to dig deeper in their pockets to pay more for bread as they go up again by between 5 shillings and 8 shillings as bakers make a fresh attempt to pass the additional cost in the price of wheat to consumers.

The Finance Bill 2021 proposed the introduction of a 16 percent duty on bread effective July this year should it be adopted, reversing the current trend where the commodity enjoys a zero-rated status.

In January 2021, the price had gone up by the same margin, but bakers were forced to beat a retreat after getting stiff competition from supermarkets, which maintained a lower cost on their in-house brands.

Mr. Bimal Shah, the managing director of Broadway Group of Companies said the duty does not augur well for both the industry and consumers.

Bimal Shah noted that wheat prices had increased significantly due to the rise in global market prices which accounts for 75 percent of Kenya’s raw materials.

“It is a wrong move to introduce a 16 percent duty on bread as this will increase the cost and make it expensive for ordinary Kenyans who are already grappling with the high cost of production,” said Mr. Shah.

A 400 grams loaf of Super loaf bread is now retailing at Sh55 from Sh50 previously with 800 grams of Festive brand selling at Sh100 from Sh92.

It is estimated that a tonne of wheat flour increased from Ksh25,300 to Ksh33,000 representing a 30 percent raise.

Infant powder milk has also been targeted, the price set to go up after the imposition of a 16 percent taxation.

Borrowers will also be hard hit by the new proposal which subjects loans to a processing fee of 20 percent excise duty, this means lenders will pass the cost to the borrowers making loans more expensive

This notwithstanding the fact that the government already removed the capping on interest rates and allowed banks to charge in line with the central bank rate.