You will pay more for sugar, bread, rice and cooking oil in June, CBK survey shows

Gear up for higher prices of sugar, bread, eggs, rice, cooking oil and other food items this month, farmers and traders have warned, citing high input and fuel costs, reduced local production and high import prices.

Results of the Central Bank of Kenya (CBK) Agricultural Sector Survey conducted between May 9 and 12 and released last Friday show that prices of major food commodities will remain high in June and will be the main drivers of inflation during the month.

The survey assessed changes in wholesale and retail prices, expectations of changes in prices and output, and factors affecting the sector.

The survey found that the long rains between March and May were the main reason for the fall in prices of short-term crops such as vegetables.

Tomato farmers in Gilgil and Naivasha said supplies from Subukia had increased, leading to a drop in prices. Meanwhile, the price of maize remained stable in May. However, the prices of some rice varieties, beans, potatoes, sugar and wheat remained high, indicating that they had not yet recovered from the effects of last year's drought.

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Respondents said high fuel prices, increased costs of inputs such as animal feed, reduced acreage for crops such as rice, and increased import costs for sugar, cooking oil and wheat will keep prices of these commodities high this month.

Distance to markets, supply chain disruptions and labour costs were also found to have a significant impact on food prices. While the prices of some food items such as vegetables fell in May, the prices of other food items such as sugar rose and, together with higher electricity and fuel costs, helped push up inflation by 0.1 percentage point, or 1.26 per cent.

Inflation reached eight per cent in May, up from 7.9 per cent in April, according to the Kenya National Bureau of Statistics (KNBS), as households find it increasing.

The year-on-year price changes for food, energy and transport, which account for about 57 per cent of household budgets, were 10.2 per cent, 9.7 per cent and 10.1 per cent respectively.

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Housing, water, electricity, gas and other fuels, which make up the energy index, and transport were driven by an increase in the cost of petroleum products, with petrol, diesel and kerosene prices averaging Sh183.29, Sh169.10 and Sh161.83 per litre, respectively, nationwide.

The high cost of sugar exacerbated the food and non-alcoholic beverage index, which rose 49.2 per cent year-on-year and 22.1 per cent month-on-month, with a kilogramme of the sweetener averaging Sh194.29 in May from Sh159.10 in April.

"Prices of sugar, carrots, onions and beans increased by 22.1, 6.3, 5.1 and 3.6 per cent respectively between April and May. However, the prices of kale, cabbage and avocado declined by 7.4, 5.7 and 4.4 per cent respectively,” KNBS said.