The price of milk in shops has jumped by up to Sh5 for a half-litre packet, putting the retailers on the spot given that there has been no adjustment from the processors in recent days.
In supermarkets, the price of 500ml fresh milk that was selling at Sh45 has now gone up to Sh48 while the small shops are selling the same at Sh55.
New Kenya Cooperative Creameries managing director Nixon Sigey said he was not aware of any price adjustments at the processor level.
“We have not reviewed our prices, I need to check with the retailers,” said Mr Sigey, who is also the chairman of Kenya Dairy Processors Association.
A few retailers, however, said they are yet to increase prices.
“We have not upped prices at the retail level before any increase by the processor,” Naivas Supermarket chief operations officer Willy Kimani said.
Retailers argue that there has been a shortage of the commodity with some of the brands such as the Ugandan-based Lato now missing on shelves.
“We are not getting enough supplies at the moment and the little that we get comes at a higher price and that is the reason why we have had to adjust our prices,” said James Ng’ang’a, a shopkeeper in Nairobi.
Livestock Principal Secretary Harry Kimtai said it was likely the price had risen on the back of a decline in production caused by drought in the current quarter.
Mr Kimtai said milk production was good last year when the country recorded higher volumes compared with previous years. However, he added, the drought that hit parts of the country from December could have had a negative impact on production.
“It is a factor of demand and supply and production could have been cut by drought which is likely to trigger a jump in price,” Mr Kimtai told the Business Daily yesterday.
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.
All processors increased the cost of milk by between Sh3 and Sh5 for both fresh and long-life brands respectively in September last year, citing high producer prices in the market.