The price of wheat products is expected to drop in October after millers placed orders for the commodity at a time its price in the international markets has declined by 36 percent.
The price of wheat in the global market dipped to Sh35,995 a tonne last week from Sh56,118 in March, when the world recorded the highest cost of the commodity as Russia invaded Ukraine, cutting supplies.
Millers say the orders they are making now will be delivered at the port of Mombasa port in October as there is normally a three-month lag on shipment.
“Yes, the prices have dropped but this can only reflect in the cost of wheat products in October, not now. The wheat being shipped in the country at the moment was based on the expensive prices then,” said Rajan Shah, chief executive officer of Capwell Industries.
About 66 percent of wheat that Kenya imports come from the two warring countries and the current blockade has seen a 400-gramme bread shoot to Sh55 from Sh50 with a two-kilogramme packet of flour now retailing at Sh202 from Sh150 in April.
Russia and Ukraine are key players in the global grain market, with their wheat exports accounting for 23 percent of international trade in the last financial year, according to the US Department of Agriculture.
The price of wheat jumped 28 percent between April and May after India banned exportation of produce to protect its local stocks.
India is the world’s second-biggest wheat producer after China.
Kenya relies on global wheat supply to meet its demand, importing up to 75 percent of the grain. Manufacturers last month asked the government to waive the 10 percent import duty on wheat.