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Commodities

Powder milk import set to reduce prices

Production Workers at Brookside dairy factory in Ruiru. PHOTO | JEFF ANGOTE | NMG
Production Workers at Brookside dairy factory in Ruiru. PHOTO | JEFF ANGOTE | NMG 

Milk prices are expected to remain high until next month when the first consignment of the powder milk is set to land, industry regulator has said.

Kenya Dairy Board (KDB) said local production had not picked up as expected with some of the regions that have not received sufficient rains registering a decline in production.

KDB managing director Margaret Kibogy said there has been a 20 per cent production growth in the Rift Valley where farmers majorly practice free-range farming dependent on rain-fed forage.

The region had suffered a sharp decline in production due to drought.

Dairy farmers in central Kenya largely practice zero-grazing and most of them were moderately hit by drought, hence maintaining production.

“There has been an increase of 20 per cent in production and this is not sufficient to lower the consumer prices below the current cost.

However, we expect that the imports that are expected at the end of the month will cut the price further,” said Ms Kibogy.

Dry Spell

She said milk processors, who are supposed to import the powdered milk are currently going through the quotations received from different countries before the importation kicks off.

“I have talked with the processors and they say they are going through different quotations that they have received from different markets and they expect the first lot of imports at the end of the month,” she said.

Treasury secretary Henry Rotich a fortnight ago removed duty on powdered milk to allow importation of 9,000 tonnes of the product to ease the biting shortage.

Major dairy processors announced price reductions last month, attributing it to increase in raw milk supplies after onset of the rainy season.

Milk prices had shot to an all-time high of Sh65 per half a litre packet in retail outlets following prolonged drought that lasted from December 2016 to May, one of the longest dry spells recorded in the recent past.

The drop has seen the price of a 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.

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