The retail price of cooking oil in the country has increased by a quarter for a 20-litre container since January on the back of a rally in edible oils cost globally.
The rally is attributed to reduced production in exporting countries.
A spot check by the Business Daily indicated that retail prices increased to average Sh4,587, with the lowest cost brand in two leading retailers at Sh3,896 and the highest at Sh6,540.
The price has increased from an average of Sh3,600 by end of January.
Tax changes have also contributed to the increase. Prices were lower last year following the VAT rate cut to 14 percent under the Covid relief measures announced by the government, but this was reverted to 16 percent at the end of December.
The global price of palm oil, the most widely consumed edible oil, has been increasing since last year after the Covid-19 lockdowns cut output from plantations in Southeast Asia.
News agency Reuters reported on June 15 that Malaysia’s benchmark crude palm oil price touched $1,007.30 a tonne (Sh108,587) in mid-March, the highest since 2008.
The commodity was trading at $945.27 a tonne (Sh101,900) in the first week of January. Kenya’s key source of crude palm oil in Malaysia, part of which is re-exported to Uganda.
The UN food agency, Food and Agriculture Organisation also said the increasing price in vegetable oils is driven by the higher cost of other oils such as palm and soy, due to slow production growth in major exporting countries while global imports remain strong.
Kenya’s animal and vegetable oils imports rose by 78.5 percent to Sh21.8 billion in the third quarter of last year compared to Sh12.2 billion in the corresponding period in 2019.
In the nine months to September, the value of the oils increased by 59.7 percent to Sh69.70 billion from Sh43.64 billion.
The higher price of cooking oil will exert upward pressure on food inflation, given the essential nature of the product in most meals and the already high prices of other food items such as milk, flour and fresh vegetables.
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