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Commodities

Milk processors import only half of their duty-free quota

Workers at the Kiganjo New KCC factory pack powder milk. FILE PHOTO | NMG
Workers at the Kiganjo New KCC factory pack powder milk. FILE PHOTO | NMG 

Processors have imported only half of the duty-free quota of milk powder allowed by the Treasury even as the window to make the shipments draws to a close next week.

Agriculture secretary Willy Bett confirmed that about 4,500 tonnes of the product, out of the permitted 9,000 tonnes, had entered the market.

Treasury secretary Henry Rotich had in May removed duty on imported milk to ease the shortage that had resulted in a sharp rise in prices.

The duty waiver was supposed to come to an end in July but it was extended after processors failed to procure the commodity in time citing high cost in the international market.

“Half of the total quantities have landed in Mombasa and we are still waiting to see if processors will bring in the remaining quantities before the duty free window closes at the end of the month,” said Mr Bett.

He, however, said failure to bring in the required volumes will not impact negatively on supplies given that production from farms had improved following the onset of rains.

“We have witnessed improved supplies from the market since it started raining and we hope the new volumes are going to stabilise the market,” he said in an interview Thursday.

20 per cent increase

Kenya Dairy Board (KDB), the sector regulator, said last month the volumes had gone up by more than 20 per cent since the onset of rains.

Severe drought in most parts of the country cut milk production by almost 50 per cent. Milk prices shot to an all-time high following the drought which lasted from December 2016 to May 2017, one of the longest dry spells recorded in the recent past. Processors reduced shelf prices in May following a marginal increase in production.

The drop saw the price of a half-litre packet of Ilara reduce to Sh55 from Sh65, Tuzo Fresh to Sh52 from Sh62 and Molo fresh to Sh50 from Sh60 with KCC Fresh selling at Sh50 down from Sh60 at major retail outlets.

The volume of milk collected by processors fell by 36 per cent from 56.44 million litres in October 2016 to 36.11 million litres in February this year.

Kenya has been experiencing erratic rains that have hampered negatively on the development of forage in the fields.

The country is nonetheless expected to record sufficient rains for the rest of the year, the Kenya Meteorological Department said.

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