Relief for besieged households as cost of maize flour, rice plummets

After going through lean times during the past two years, households with tight purse strings can afford a smile as the cost of basic commodities start heading south.

This will minimise inflationary pressure on Kenyans, coming as a relief to millions of consumers who have been grappling with high cost of living.

Food takes up the largest share (36 per cent) of the basket of goods that is used to calculate inflation.

The price of unga, the country’s major staple has dropped to a low of Sh92 on average, from a high of Sh120 at the beginning of the year.

Some flour brands are retailing at lower than the subsidy price of Sh90 with a two kilogramme packet attracting Sh88.

The price of maize flour had shot to a high of Sh120 for a two kilogramme packet after the government backed subsidy programme came to an end in January.

The price of rice too has also declined significantly since December last year from Sh200 per kilogramme to Sh180 in May before settling at Sh130 currently at the country’s major irrigation scheme in Mwea.

Rice is the second most staple in the country after ugali, and its consumption has been increasing over the years. The consumption rate has been growing 10 per cent yearly and now stands at 400,000 tonnes, according to State data.

Last year’s sharp rise in cost of rice was precipitated by a decline in production following prolonged drought that affected Mwea Irrigation scheme, which supplies 80 per cent of the country’s total production.

The country relies on imports to bridge the deficit. Kenya produces 150,000 tonnes a year creating a deficit of 250,000 met through imports.

Last month, Kenya National Bureau of Statistics indicated green maize recorded the sharpest price drop by a quarter to Sh32 per cob, followed by onions which fell 18 per cent to Sh147 a kilo while Irish potatoes eased 15 per cent to Sh85 a kilo.

Other food items whose prices dropped include ripe bananas, pawpaw and loose maize grain.

The price of sugar, too, has come down after shooting through the roof last month following a crackdown by government on illegal sugar.

The price shot to a two-year high of Sh280 for a two kilogramme packet, before easing this month to a low of Sh250 after the supply of the sweetener improved in the market.

The factory price seemed to have eased too with the Sugar Directorate saying on Friday that the prices had declined to Sh5,300 from Sh5,500.

“The ex-factory price was Sh5,300 this (last) week,” said the head of the directorate Solomon Odera in an interview with the Sunday Nation.

The cost of wheat flour has also been on a downward trend in recent days, following an increase in supply to the market.

Millers have been forced to cut down the price of wheat flour from Sh120 in May to an average of Sh115 as competition intensifies.

Last week, processors raised concern that an influx of cheap wheat from Tanzania was driving them out of market.

READ: US firm Seaboard still seeking to delist Unga

Millers claim some traders are repackaging duty free flour imported from Egypt and Tanzania and selling it as a local product, which is cheaper than Kenyan wheat flour by Sh80 a bale.

“Cheap flour is entering the market in ever increasing quantities, leaving Kenyan millers uncompetitive. Bakers and consumers are opting for cheap imported flour as opposed to local one due to price difference,” said millers last week.

The price of milk, too, has remained low in the last one year with a 500ml packet retailing at an average of Sh50. However, processors have warned of a likelihood of a rise in cost resulting from a shortage that is being witnessed.

Milk intake in the formal sector has dropped by 10 per cent in five months to May with further reduction expected with the onset of cold season.

Data from the Kenya Dairy Board (KDB) indicates the volumes have declined from 52 million kilogrammes in April to 46.8 million kilos in May.