More pain as food prices expected to increase further- CBK report

Prices of foodstuffs have increased in Mombasa. [Omondi Onyango,Standard]

The supply of food items is expected to increase further, a report by the Central Bank of Kenya shows.

The report was filed from data collected by CBK's Agricultural Sector Survey conducted between May 9 and 12. It involved two hundred and four (204) respondents who gave their opinion during the long rainy season and the supply chain constraints in the market.

According to the survey, the supply of key food items mainly vegetables is expected to increase. The report also indicates that vegetable prices decreased in May following the continuation of the long rains that began in March.

"Tomato farmers in Gilgil and Naivasha markets, for example, revealed that supplies from the main source markets in Subukia had increased significantly leading to a significant reduction in prices. However, the already soaring egg prices may go up since poultry rely heavily on processed feeds," the survey reads in part.

As per the report, the price of sugar increased significantly in the past month. This was due to limited supplies from the sugar belt which reported reduced cane deliveries and crop substitution.

The price of maize remained stable in May following the March 17 gazette notice where the government allowed animal feed manufacturers to import 500,000 tons of yellow maize duty-free before August 2023 which has also helped stabilize the prices.

However, the prices of rice varieties, beans, potatoes, sugar, and wheat remained elevated, an indication that they are yet to recover from the effects of the prolonged dry weather reported last year.

"Although farmers reported increased pasture following the long rains, both packed and unpacked milk prices increased marginally in May owing to the increased price of animal feeds and high transport costs," the report states.

"The price of rice has not benefited much from the recent harvest in Mwea due to low output arising from the protracted dry weather conditions in 2022, changing consumer preferences, and increased competition from cheaper rice imports which have forced farmers to reduce the acreage."

Access to government-subsidized fertilizer among the sampled farmers increased to 43 percent in May 2023 compared to 29 percent in early March 2023.

According to the survey, weather conditions, transport costs, and input prices continue to impact retail and wholesale market prices while limited demand and price distortion by middlemen were found to affect the market of farm produce.

CBK says the survey sought to gather information on the recent trends in prices of agricultural commodities, output, and their expectations in production.