Milk intake in the formal market last year stood at 10 per cent of the annual production despite a strong official campaign to formalise the industry.
Statistics from Kenya Dairy Board (KDB) indicate milk intake by processors stood at 535 million litres out of an estimated five billion litres full-year production.
This comes at a time KDB is working to increase the market share of the formal market as it seeks to grow exports.
Kenya has an annual processing capacity of 1.4 billion litres which translates to 3.9 million litres a day. However, processors do not operate optimally due to competition by the informal sector.
“Informal market is taking over a chunk of milk that is produced in the country; this leaves processors with very little of the commodity to process. At KDB, we are working to increase the intake to factories,” said KDB managing director Margret Kibogy.
KDB is working with other stakeholders in training farmers to embrace the formal market, a move also aimed at raising safety standards.
KDB has been educating consumers on importance of consuming processed milk as opposed to the raw one, but households have been constraint by high cost of the processed commodity.
For instance, a litre of processed milk retails at over Sh100 while the same quantity of raw milk sells at about Sh70.
The situation came even as production in the country dropped last year occasioned by drought that affected Rift Valley and central regions, which are the major dairy producing zones.
Data from the board shows the volume produced last year went down 17 per cent to 535 million litres from 648 million litres in 2016.
Milk prices shot up to an all-time high following prolonged drought that lasted from December 2016 to May 2017, one of the longest dry spells recorded in recent past.