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Cost of living rises to seven-month high

BUSINESS NEWS
By Dominic Omondi | March 2nd 2021

Traders at Marikiti market, Nairobi. The price of cooking oil, vegetables and mangoes registered the highest jump last month. [David Njaaga, Standard]

The cost of living went up for the seventh consecutive month as prices of essential commodities rose at a time when most consumers are struggling.

Year-on-year inflation or the overall rise in the prices of goods and services reached 5.78 per cent last month compared to 5.69 per cent in January.

Non-food and non-fuel inflation, remained largely in check, an indication that the increase in the prices of products has not been informed by increased demand but low supply of food and fuel.

The acceleration in the overall prices of goods and services was driven largely by cooking oil, sukuma wiki, cabbages, and mangoes, whose unit prices increased by 17.8 per cent, 13.3 per cent, 9.1 per cent and 8.69 per cent respectively.

 As a result, said the Kenya National Bureau of Statistics (KNBS), which compiled the report said the month-to-month food and non-alcoholic drinks’ index increased by 1.01 per cent between January 2021 and February 2021.

“The food inflation was mainly attributed to an increase in prices of some food items which outweighed the decrease in prices of other foodstuffs,” said KNBS in a statement on Saturday.

Cooking oil registered the highest jump with a kilo retailing at Sh236.45 last month, compared to Sh200.7 in February 2020.

Beginning early last year, bad weather, low use of fertiliser and shortage of manpower triggered by social distance measures imposed by countries during the pandemic, depressed the production of palm oil in Asia, leading to the surge in prices of cooking oil in Kenya.

Crude palm oil is the main ingredient used in the manufacture of cooking oil in Kenya.

The scarcity in some of the items was compounded by a decrease in disposable income for Kenyans following the adverse effects of Covid-19, which saw them lose jobs.

Moreover, the tax relief measures that the government had given to Kenyans to cushion them against the negative effects of the pandemic have since been rolled back, making some of the products expensive for Kenyans.

However, during this period, prices of tomatoes decreased by an average of 24.1 per cent with a kilo retailing at Sh97.40, down from Sh128.40 in February last year.

“Prices of lemons, mangoes and maize grain decreased by 5.64, 0.33 and 0.18 per cent, respectively,” said KNBS.

Retail prices of kerosene and diesel also declined by 9.9 per cent and 2.4 per cent respectively.

“The housing, water, electricity, gas and other fuels’ index, increased by 0.43 per cent between January and February 2021. This was mainly attributed to an increase in the price of kerosene by 6.02 per cent between January 2021 and February 2021.”

The cost of electricity, on the other hand, went down by 2.8 per cent.

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