Economy

Cheap flour cuts inflation to 4.7pc 5-month low

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Workers arrange maize flour at Tuskys Supermarket on Kenyatta Avenue, Nairobi. The price of the staple is likely to rise next week. FILE PHOTO | NMG

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Summary

  • January inflation fell from 5.71 per cent a month earlier, offering a relief to consumers who were burdened with education-related costs at the start of the first term.
  • KNBS data shows a kilo of maize grain dropped 40 per cent to Sh35.23 over the past year while a two-kilo packet of maize flour fell by Sh35.68 to Sh87.20 in the review period.
  • Maize flour, Kenya’s staple, is retailing at levels last seen in 2012, on increased maize harvest—which was projected at 46 million bags.

Cheap maize flour helped cut inflation to a five-month low of 4.7 per cent in January when electricity and transport costs increased.

The Kenya National Bureau of Statistics (KNBS) Thursday said inflation fell from 5.71 per cent a month earlier, offering a relief to consumers who were burdened with education-related costs at the start of the first term.

“The cost of several foodstuffs in January 2019 was much lower compared to the same period of the previous year,” KNBS director-general Zachary Mwangi said in a statement.

KNBS data shows a kilo of maize grain dropped 40 per cent to Sh35.23 over the past year while a two-kilo packet of maize flour fell by Sh35.68 to Sh87.20 in the review period.

Maize flour, Kenya’s staple, is retailing at levels last seen in 2012, on increased maize harvest—which was projected at 46 million bags.

This broke the trend where harvests have been declining since 2015. This points to an easing of the food crisis that has for the past two years forced Kenya to rely on imports to meet its needs for the staple food.

A kilo of sugar and beans fell Sh10.16 and Sh7.03 respectively compared to a year earlier. But electricity, rent and transport costs were higher compared to January last year.

Households consuming 200 units of electricity paid Sh416.30 more in January compared with the Sh4,485.52 they paid last month.

Rent for a single room also went up by Sh195.45 to stand at an average of Sh4,456.98 compared with January 2018.

Long distance transport costs dipped marginally after the Christmas season but remained higher than last January’s.

Bus fares for 350km journey, which is equivalent to Nairobi-Kisumu trip, stood at Sh1,239 last month compared to Sh1,245 in December and Sh1,074 in January last year.

“The housing, water, electricity, gas and other fuels’ index increased by 0.20 per cent as a result of higher cost of house rents and cooking fuels,” Mr Mwangi said.

The price of diesel, a key commodity used to run farm and industrial machines as well as in public transportation, fell by Sh8.79 per litre on average compared with December.

Petrol, on the other hand, retailed at Sh9.97 less to average Sh104.99 per litre in January, reflecting lower cost of petroleum products landed at the Port of Mombasa due falling global crude oil prices amid a stable shilling.

The two commodities, however, traded slightly higher compared with January 2018 as the impact of eight percent value added tax (VAT) last September is yet to be cancelled out.