Milk prices increase second time in months on drought

Milk processing at the Meru Dairy Union. PHOTO | PHOEBE OKAL | NMG

What you need to know:

  • All the leading processors have adjusted their prices by between Sh2 and Sh5 for a 500ml packet of fresh and long-life brands.
  • Kenya Dairy Board (KDB) said the current situation has been precipitated by the ongoing drought in most parts of the country.
  • Shopkeepers in small shops are now selling long-life milk for Sh60 from Sh55 previously while the fresh one is going for Sh55 from Sh50 previously.

A shortage of milk caused by drought has pushed up the retail price of the commodity in a major blow to consumers who are grappling with the high cost of other basic goods.

All the leading processors have adjusted their prices by between Sh2 and Sh5 for a 500ml packet of fresh and long-life brands.

Kenya Dairy Board (KDB) said the current situation has been precipitated by the ongoing drought in most parts of the country.

“The shortage is due to drought but the expected rains will reverse the trend,” said Margret Kibogy, KDB managing director.

The review has raised the retail price of a 500ml packet of fresh milk to Sh53 from Sh50 for New KCC brands and Sh52 from Sh48 for Ilara while the long-life brands are retailing at Sh55 in supermarkets.

Shopkeepers in small shops are now selling long-life milk for Sh60 from Sh55 previously while the fresh one is going for Sh55 from Sh50 previously.

The upward pressure on prices is expected to remain in the coming days as processors are not getting enough volumes from farmers.

“We are now selling half a litre of long-life milk at Sh60 from Sh55 previously after our suppliers adjusted their selling price,” said James Ng’ang’a, a shopkeeper in Nairobi.

Mr Ng’ang’a said they are hardly getting enough stocks from the suppliers and that his customers have had to contend with the little that is available.

The situation is expected to be even worse as processors do not have stocks of powdered milk, which they normally reconstitute into fresh when there is a shortage in the country in order to tame high prices.

The latest increment comes as a blow to consumers given that retailers had already reviewed prices of the commodity by up to Sh5 early this month.

Processors have previously justified the increment in the price of the milk, citing a sharp rise in producers’ prices who are paid up to Sh45 for a litre of the commodity.

All processors increased the cost of milk between Sh3 and Sh5 for both fresh and long-life brands respectively in September last year, citing high producer prices in the market.

Data from the Kenya National Bureau of Statistics shows the formal sector recorded an intake of 802 million litres of milk last year against 684 million that was realised a year earlier.

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