Food prices rise for ninth straight month as drought ravages Kenya

Foodstuffs in Kenya are now priced at 12.54 per cent higher than they were at the same time in 2016. This has sent inflation to 6.99 per cent, the highest in eleven months.

Latest data from the Kenya National Bureau of Statistics (KNBS) showed food and non-alcoholic beverages' prices have risen for nine months on end since May 2016, with the latest jump being attributed to drought.

"This was mainly attributed to increases in the price of cabbages, spinach, sukuma wiki, maize floor, wheat flour and maize grain, which were partly contributed to by prevailing drought conditions," noted KNBS Director General Zachary Mwangi.

Data collected in the second and third week of January in selected retail outlets in 25 data collection zones shows prices of food and non-alcoholic beverages recorded the second highest jump after education when compared to December prices.

Month-on-month, it was only the price of hotel and restaurants that remained constant as all the other 10 selected items included in the consumer price index recorded a rise in January.

A kilo of sukumawiki and cabbage each recorded 6.7 per cent rise in price to Sh48.74 and Sh71.58, making them the food items that experienced the fastest rise. While a kilo of sukumawiki now costs Sh11.99 more than it did in January last year, cabbage costs Sh23.83 more.

Prices of other items such as spinach, milk, beans, onions, wheat flour, sifted maize flour and maize grains have all increased in prices and so has the cost of renting a single room. Only the prices of mangoes, kerosene and diesel eased during the month-on-month.

Education inflation recorded a month-on-month inflation of 2.28 per cent. January is usually the period when most learning institutions resume learning and therefore acceleration in inflation reflects more expenditure.

In its Monetary Policy Statement on Monday, Central Bank of Kenya (CBK), while listing drought as among the uncertainties that face the economy, noted it expects prices of both food and electricity to 'remain elevated in the near term."

In particular, CBK noted that prices for tomatoes, sugar, cabbages, sukuma wiki, and maize flour remained elevated even in December, despite an ease in overall inflation.

The regulator noted that in its January Market Perception Survey, banks and non-bank private sector had said they expected the prevailing dry weather conditions to slow down agricultural sector growth in the first quarter of 2017.

This could put more pressure on food prices, which account for 36 per cent of the food basket that is used to assess the level of inflation. Food Inflation in Kenya hit an all-time high of 26.20 per cent in October of 2011 and a record low of 1.44 per cent in October of 2012.

However, at the current level, overall inflation is still the CBK's target level of between 2.5 per cent and 7.5 per cent. In December, inflation had eased to 6.68 per cent after rising for three straight months.