Kenyans will continue paying more for wheat flour and bread despite a 30 percent decline in the global price of wheat as manufacturers say a weakening shilling has made the imports more expensive.
The international price of wheat has dropped to $360 for a tonne of grain currently from a high of $520 in May last year, which was the highest cost to be recorded in the last 11 months.
Processors, however, argue that they are spending more to ship in wheat on the back of a depreciating shilling that has made imports expensive despite a decline in the price of the commodity.
“There will be no reduction in the price of bread because of a strong dollar that has made the imports even more expensive,” said Bimal Shah, chief executive officer of Broadway Group.
Mr Shah said the price of bread was to rise further last year in October by Sh5 but that did not happen because of steep competition between processors and supermarkets, forcing them to forego their margins.
Supermarkets have kept the price of their in-house bread low when compared with the supplies that they are getting from processors.
For instance, the cost of 400 gramme of in-house bread goes for Sh55 when compared with Sh60 that one would pay for those that are supplied to the retail outlets by manufacturers.
Processors have been accusing retailers of undercutting them on price in order to attract customers to buy their bread.
