Commodity Prices Remain High as the Year Narrows

2022 will historically be among the toughest years, with the cost of living spelling doom for many Kenyan households. Cooking oil has been the most expensive basic commodity since March with a liter retailing at above 400 shillings.

A spot check by Soko Directory in some of Naivas and Quickmart supermarkets in Nairobi CBD on Monday revealed that 1 liter of Avena cooking oil and Rina is retailing at 410 shillings, an increase from 350 and 385 shillings in March, and about 250 shillings in 2021. Consumers are at the same time buying 5 liters of the same brand at 1,379 and 1,853 respectively. Fresh fry remains the expensive brand with 5 liters of the commodity going for 2,014 shillings.

The price increase was primarily attributed to a surge in the price of palm oil in 2020. The European war also disrupted the global market with the raw material prices rising to between 200,543 shillings per metric ton and 225,522 shillings in march 2022. Palm oil manufacturers say that before the war, the commodity retailed at 168,578 shillings per ton. This was more than double its cost before the onset of the Covid – 19 pandemic in March 2020.

Kenyans have been hopeful that the price of cooking oil would contract following the lifting of Indonesia’s ban on palm oil exports in May. A country’s commerce Ministry official said the country had run out of storage capacity in less than a month after announcing the sudden export ban. The price fall has however not been reflected in retail stores with Kenyans still purchasing it at a high cost.

Milk and sugar prices have also gone up since early this year making breakfast costlier. A 500 ml packet of fresh milk is now retailing at 58 shillings while Tuzo and Fresha brands are retailing at 62 shillings and 60 shillings respectively. Meanwhile, a kilogram of sugar retailed at 157 shillings.

Kenyans are also straining to purchase a bar of laundry soap with 800 grams of Jamaa soap retailing at 227 shillings while a kilogram of whitewash is going for 293 shillings.

Wheat flour prices have remained unchanged with  2kg of Pembe, Ajab, and Exe Brands going for 200,208 and 197 shillings respectively. The price of eggs has slightly contracted with a crate selling at 410 shillings from 450 shillings in August. One egg is currently retailing at 13 shillings.

Factors driving up the high cost of living include crude oil prices, the Russia-Ukraine crisis, and drought which has led to a food crisis hurting millions of households.

According to World Bank, the cost of living is expected to drop from January next year as volatility in the global market eases. In its latest economic outlook for Africa, the global lender projected the country’s inflation to ease to 6.4 percent in 2023 and 5.5 percent the following year.