Small Enterprise

Feeds prices increase 20 per cent as drought cuts grain supplies

Livestock producers are paying up to 20 per cent more for animal feeds compared to the previous rate as a result of a biting drought .

A grain shortage has raised the price of feeds and the Kenya Livestock Producers Association (KLPA) says this was eating into their returns.

Geoffrey Gikungu, the association’s chairman, said that animal feeds retail prices have over the past weeks gone up by between 16 and 20 per cent, hurting farmers. “We are in a situation where farmers are starving and their livestock are becoming too costly to feed. Production will certainly go down and cost of production will go up. That is not a situation that guarantees wealth creation in the livestock sector,” he said.

For instance, the wholesale price of a 50 kilogramme bag of dairy meal has, in a fortnight, increased to Sh2,050 from the previous Sh1,750, representing a 17.1 per cent jump.

The wholesale price of Polland, another critical feed, has moved from Sh1, 250 per 50kg bag to Sh1,400.  Feed manufactures are citing shortage of essential raw materials like maize, wheat and rice as the reason behind the increased prices.

He added that the onus is on the government to provide a solution “since it is the custodian of grain reserve and import policies. If this situation remains unchecked, we are headed to a major crisis in the sector.”

The poultry sub-sector is also affected with the cost of maize germ having increased from Sh1,100 per bag to Sh1,450 with that of layers feed shooting up from Sh2, 450 to Sh2, 800 per 50kg bag.

The cost of bran has shifted from Sh600 wholesale price to the new Sh900. For pig breeders, sow and weaner feeds have recorded a rise in wholesale price from Sh1,750 to Sh2,000 for the same size of bag. 

Zero-rated materials

The inflated prices of animal feeds comes just months after Treasury zero rated raw materials and scrapped the 16 per cent value added tax on the sector in order to boost the sector.

Paul Odera, the assistant manager at the Association for Kenya Feed Manufacturers (Akefema) acknowledged that there is a difficulty in the market.

“It is a fact that we have a problem in raw material supplies and we are being forced to improvise on maintaining quality in the prevailing circumstances,” he said.

“We are compiling our data while executing market checks in collaboration with the Kenya Bureau of Standards to mitigate a further disaster of counterfeits and substandard feeds.”