Consumers set to pay more for imported food

Consumers face higher food inflation in the coming months following a rally in international prices of commodities imported into the country.

Fresh data by the Food and Agriculture Organisation (FAO) show the rally in prices spread to commodities such as sugar and oil seed while those of grains like rice are also expected to go up.

The agency’s Food Price Index (FFPI) averaged 176 points in August, up nearly nine points from July.

The five per cent increase brought the index up to its highest level since September 2008, but still 38 per cent lower than the June 2008 peak.

“The FFPI surge mainly reflected the sudden sharp rise in international wheat prices following drought in Russia and the country’s subsequent restrictions on wheat sales. But other drivers included higher sugar and oil seed prices,” FAO said.

The latest surge has been triggered by a sharp climb in the cost of wheat and related products after the world’s third largest producer Russia slapped a ban on exports due to a devastating drought and heat waves.

The effects of this have already reflected locally with bread makers increasing the prices for a 400-gramme loaf by at least Sh4, citing the rally in global prices of wheat while other food items such as milk and potatoes have also gone up in the past few weeks.

Kenya produces 300,000 tonnes of wheat annually, a third of the country’s consumption.

Analysts said variations in global prices of items such as sugar and rice are also expected to reflect on local consumer prices.

“Unfortunately we are not immune to global prices of some commodities such as rice, wheat and sugar because the markets are liberalised and consumers always have to bear with the effects that come through from the international scene,” said Dr Romano Kiome, the Agriculture permanent secretary.

Data released on Tuesday by the Kenya National Bureau of Statistics (KNBS) showed the month-on- month food and non-alcoholic drinks prices climbed by 1.9 per cent between July and August.

But inflation went down to 3.2 per cent last month compared to 3.6 per cent in July, pushed by the fall in mobile airtime.

Some of the food products which recorded price increases include milk, sugar, potatoes and wheat flour, said the Bureau.

“On the other hand there were significant falls in the prices of maize flour and maize grain.”

Food makes up 36.04 per cent of the basket of goods used to gauge inflation.