Market News

New KCC reconstitutes milk powder to keep consumer price stable

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New KCC Managing Director Nixon Sigey. FILE PHOTO | NMG

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Summary

  • New KCC managing director Nixon Sigey said the reconstitution has helped boost supply, hence maintaining the cost despite high producer prices that processors are paying farmers.
  • Milk production has remained low since last year.
  • Mr Sigey said the current stocks of powder milk in the country will last for the next one month with the production expected to have recovered in the next three weeks following the onset of rains.

Consumer milk prices will remain at the current cost after the New Kenya Cooperative Creameries (KCC) is reconstituting milk powder to cover for the supply deficit in the market.

New KCC managing director Nixon Sigey said the reconstitution has helped boost supply, hence maintaining the cost despite high producer prices that processors are paying farmers.

Milk production has remained low since last year.

Mr Sigey said the current stocks of powder milk in the country will last for the next one month with the production expected to have recovered in the next three weeks following the onset of rains.

Kenya has been receiving off season rains this February which are expected to help in regeneration of fodder in the fields.

Normally, production of milk remains low in the first three months of the year because of the dry season.

“The country is not exposed even when we exhaust the current stocks of powder milk as we expect production to rebound in the next three months,”said Mr Sigey.

Data from Kenya Dairy Board showed milk volumes declined by 0.95 percent last year to hit 679 million litres, down from 685 million litres in 2019.

This was the first drop in production in three years, largely die to unstable weather that led to insufficient feed.

Consumer milk prices rose to Sh55 for a 500ml packet of long-life milk from Sh50, with processors citing low volumes from farmers, which has raised producer prices.

For instance, Brookside is paying 17 per cent more for a litre of raw milk, which pushed the cost to over Sh40 for a chilled commodity delivered at the firm in Ruiru.