Market News

Probe in the pipeline as milk prices stay high

Milk packets
Milk on supermarket shelves. PHOTO | DENNIS ONSONGO | NMG 

The Livestock Department wants the dairy sector regulator to probe the high consumer prices of milk at a time the farm-gate rates have fallen

Livestock Principal Secretary Harry Kimtai said the Agriculture ministry would task the Kenya Dairy Board (KDB) to look at the variance between the price at which the processors are buying milk and what consumers are paying for the commodity off the shelves.

Milk processors cut producers price of milk by Sh8 per litre, citing increased supply.

“The Kenya Dairy Board is the one charged with the regulations and we shall be asking them to examine the variance between the buying price from farmers and the retail price at the shelf to examine if the current cost is justified,” said Mr Kimtai.

The half-litre packet of long-life milk is retailing at Sh50 across all brands while the fresh one is going at Sh45.


Volumes of milk

KDB said the volumes of milk have increased significantly with four leading processors now processing 1.2 million litres, up from 800,000 litres in November last year.

Last month, the regulator said the milk market has been liberalised and that KDB might not have much say in regard to the pricing.

“The dairy sector was liberalised a while back and processors have been at liberty to set prices based on the demand and supply of milk in the market,” said Margret Kibogy, KDB managing director.

Mr Kimtai says the growth in volumes has been occasioned by high level of sensitisation and capacity building to farmers and competitive prices offered by milk factories.

Until last year, processors were offering record high price. They have been buying a litre of the commodity at between Sh38 and Sh40 per litre before it was revised downwards early this month to about Sh30.

Data from KDB shows the volumes bought by five major processors hit 634 million litres up from 591 million realised in the previous year.