Scarcity of maize, wheat and beans led to rise in retail prices

Kenya’s largest contributor to overall economic growth, agriculture, has recorded the slowest growth in five years during the second quarter of the year on account of reduced rainfall.

The latest data from the Kenya National Bureau of Statistics (KNBS) show that growth in agriculture, forestry, and fishing decelerated to 1.4 per cent during the quarter under review from 7.1 per cent in the corresponding quarter of 2016.

The substantial slowdown was occasioned by insufficient long rains experienced during the period, which affected most food crops, the statistics office said.

“Performance of the agriculture sector was exacerbated by widespread drought experienced during the fourth quarter of 2016 and somewhat suppressed long rains in 2017 that considerably affected crop production and rearing of animals,” indicated KNBS.

The bureau further said constrained supply of food crops such as maize, wheat, and beans led to a sharp rise in their respective wholesale prices.

For instance, the wholesale price of dry maize increased by 69.7 per cent from Sh2,594 per 90 kilogramme bag in the second quarter of 2016 to Sh4,402 in the quarter under review. Similarly, the wholesale price of wheat and rose coco beans went up by 10.3 per cent and 22.8 per cent respectively.

Despite the reforms in the coffee sub-sector, there was a considerable decline (58 per cent) in the production of coffee, which dropped from 14,600 tonnes in the second quarter of 2016 to 6,200 tonnes in the quarter under review.

At the same time, the volume of cane produced and delivered to factories for crushing went down significantly in the review period. In the dairy sub-sector, the dry weather conditions led to a 31.7 per cent drop in the volume of milk intake in the formal sector.

Only tea and horticulture braved the harsh weather conditions to post some growth. There was a slight improvement in production of tea, up from 109,700 metric tonnes in the second quarter of 2016 to 110,800 metric tonnes in the period under review.

Export volume

In the three months to June, the value of exports of horticultural produce improved from Sh26.6 billion booked in the second quarter of last year to Sh28.7 billion.

This was supported by growth in the export volume of cut flowers, fruits, and vegetables. Compared to the first quarter, agriculture has recovered from the negative growth of 1.1 per cent.

Overall, the gross domestic product slowed down to five per cent in the second quarter of 2017 compared to 6.3 per cent in the corresponding quarter last year.