Soaring food prices push up cost of living

By Jackson Okoth and Reuters

The high consumer price of maize flour, tomatoes and green maize has pushed up the general cost of living.

Figures released by Kenya National Bureau of Statistics (KNBS) show a rise in inflation to 29.4 per cent last month, up from October’s 28.4 per cent, mainly due to increased food prices.

The average price of a 2kg of maize flour increased from Sh81.75 in October to Sh91.05 in November.

The price of tomatoes and loose grain also increased significantly during the month under review.

But providing a relief to consumers was a decline in the price of diesel and petrol.

The average cost of a litre of diesel decreased from Sh97.97 in October to Sh90.20 in November 2008.

Similarly, the prices of regular and super petrol decreased by three per cent and 6.2 per cent, respectively.

The current inflation rate is, however, still much lower than a high of 31.5 per cent recorded in May. It has since eased to stand at 28.4 per cent in October, but has now shown signs of renewed surge.

Recent increases in the price of maize, a staple food for most households, has once again spiked up the cost of living index.

Compared to a year ago, the price of food has gone up by an estimated 39.4 per cent, as KNBS figures indicate. This is followed by fuel and power, whose prices have gone up by 26.9 per cent over the last one year, alcohol 15.1 per cent, medical services 14.6 per cent and transport 13.4 per cent.

Recording the lowest change in prices over the last one year is clothing and footwear at six per cent and housing 7.4 per cent.

"Underlying inflation, which excludes food items, however eased to 12.3 per cent from 13 per cent in October", said the bureau in a statement.

This is still much higher than the Central Bank of Kenya (CBK) target of five per cent.

In recent weeks, an artificially instigated maize shortage doubled the price of maize flour within a year.

The Government has moved to allow importation of five million bags of maize and says it will effect price cuts.

At 18.2 per cent in January, the rate of inflation has been rising sharply during most of the first-half of this year, owing to negative effects of post-election violence, rising cost of fuel and high global commodity prices.

After peaking at a near 15-year high of 31.5 per cent in May, authorities and analysts predict the rate of inflation will slow down in 2009.

"The volatility in international oil prices continues to pose a threat to price stability. Similarly, the upsurge in food as well as energy prices is a major challenge to monetary policy," says CBK in its outlook reports.

The bank assures that it is closely monitoring developments so as to be on guard against possible risks to price stability, and make any necessary adjustments to policy instruments as may be warranted.

 

 

 

 

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