Market News

Milk price set to go up as cold cuts production

Milk at a Nairobi supermarket
A customer buys milk at a supermarket in Nyeri. FILE PHOTO | NMG 

Milk processors are expected to raise consumer prices next month following a decline in production resulting from a chilly weather.

The cold weather, which kicked off earlier than expected, has seen the New KCC increase producer price per litre from Sh37 to Sh40, which is likely to reflect on consumer cost in the coming days.

Kenya Dairy Producers Association chairperson Nixon Sigey, who is also New KCC managing director, says the cold season normally starts in July running to August. However, this year it started a month earlier and is expected to impact production in the next three months.

“There have been a decline in production as a result of cold weather and this will have an effect on both the consumer and producer prices,” he said.

Mr Sigey said the low temperatures have affected production in major production regions of the Rift Valley and central Kenya that account for about 80 per cent of the milk output in the country.

“Producer prices have started going up and we will be reviewing the consumer price next month.

“Currently we are still monitoring the trends,” he said. At the present, the producers said they are still meeting the consumer demand.

The New KCC boss said he expects production to normalise in September when the cold normally comes to an end, partly due to the fact that there is sufficient fodder.

The price of milk has remained low at an average of Sh50 for 500ml packet for the last one year after hitting a high of Sh60 per litre in April last year. The latter rise prompted the government to intervene by allowing processors to bring in duty-free powder milk to ease the shortage.

Brookside Dairies had increased producer prices to Sh37 in May. The dairy, which boasts 1.5 million litres milk processing capacity, sources milk from 300 dairy co-operatives drawn from more than 27 milk producing counties.