The news that Russia may allow the resumption of wheat exports along the Black Sea has raised hopes that rising consumer prices of bread and flour in the local market will ease in the short term.
The movement of grain along the Black Sea, which accounts for 34 percent of global wheat supply, was completely interrupted following the invasion of Ukraine by Russia in March, locking out millions of tonnes from being exported to the world market.
About 66 percent of wheat that Kenya imports come from the two countries and the current blockade has seen the price of a 400g loaf of bread rise to Sh55 from Sh50 with a two-kilogramme packet of flour retailing at Sh202 from Sh150 in April.
The improved prospects for world supplies sent the most-active Chicago wheat futures down as much as 6.1 percent to their daily price limit of $10.875 a bushel on Monday, settling the day at the lowest level since May 4, according to Bloomberg.
Millers said the current stability in the market would augur well for the consumers, should it hold for long.
“We have seen some sorts of stability in the world market and it will be good news for consumers should the prices fall,” said Bimal Shah, chief executive officer of Broadways Bakeries.
The price of wheat jumped 28 percent between April and May after India announced banning the export of produce to protect its local stocks.
India is the world’s second-biggest wheat producer after China and had filled a gap in markets left by decreased output from Ukraine.
Manufacturers asked the government last week to waive a 10 percent duty imposed on imported wheat to offset the current high international prices of the grain and offer a reprieve to consumers on skyrocketing cost of flour.
Kenya Association of Manufacturers and a host of other stakeholders in the grain industry said the government should remove duty for the next year to cushion consumers from high costs.