Kenya: Cooking oil, bread, milk price rise signals expensive Christmas

A report from a review has stated that Kenyans should brace themselves for an expensive festive season after manufacturers of bread, soda, sugar, and cooking oil and milk processors set off a fresh round of price increases.

The cost of breakfast is the worst hit in the latest review after bakers and millers reviewed their prices, in what is likely to trigger inflation.

Starting this week, a 400 gramme loaf of bread will cost Sh5 more in response to the rising cost of wheat that has now gone up by 44 percent from January this year at the international market.

A tonne of wheat at the global market, where Kenya sources at least 75 percent of the annual requirement, has gone up to Sh47,520 from Sh33,000 in January.

Mr. Bimal Shah, the managing director of Broadway Group of Companies said they had no alternative but to adjust the price.

“The cost of wheat has been going up since the beginning of the year and this has made it difficult for us to maintain the prices that we have been offering consumers over time,” Mr. Shah.

A spot check on Friday revealed that the price of sugar, soda, cooking oil, among others, have also increased even as Kenyans come to terms with an expensive shopping basket after the recent spike in Liquefied Petroleum Gas (LPG) price.

A kilogramme of sugar will now retail at Sh140, up from an average of Sh130 a month ago.

While a 200 mililitre (ml) of soda has increased by Sh5 to Sh25 from Sh20, a 300ml has risen to Sh35 from Sh30, representing a 16.67 percent increase.

The average price of a one litre of cooking oil has increased from Sh250 last month to Sh300.

Refilling a 13-kilogramme cooking gas cylinder cost Sh411.66, or 20.24 percent more, to an average of Sh2,445.24, largely on the impact of the 16 percent value-added tax on the commodity in July.

Some of the customers interviewed at retail stores complained of high prices of basic stuff such as sugar.

“Majority of basic commodities such as sugar, milk and cooking oil have increased prices significantly. I do not know how I will survive going by this rate,” one of the shoppers who wished to remain anonymous said.

In smaller retail shops, a 500ml packet of milk has gone up to as high as Sh55 with processors pinning the increase on a supply shortage of the commodity in the market.

Milk processors has earlier attributed the consumer price rise to high farm gate payments to farmers.

Farmers are getting up to Sh40 for a litre of milk sold to Kenya New Cooperative Creameries and Brookside after the processors reviewed the price last year.

The prices of milk are expected to rise further in the coming weeks as most parts of the country are grappling with dry weather condition with Kenya Meteorological Department saying that the short rains from October to December will not be sufficient.

This is the third time since January that bakers have adjusted the price of bread. However, all the previous increments had to be reversed following a sharp decline on demand from consumers amid high competition from supermarkets’ in-house brands whose prices remained unchanged.

Mr. Shah also said the rise in price of bread has been occasioned by an increase in prices of other items like oil and sugar. “Since last year, we have witnessed a significant increase in cost of making bread and this, coupled with high cost of other ingredients has necessitated the price increase,” he said.

The wholesale price of sugar went up a fortnight ago to Sh6,200 from Sh5,200 previously with the effect of the sharp rise now reflecting on consumer’s cost.

Food takes up the largest share (36 per cent) of the basket of goods that is used to calculate inflation — a measure of changes in the cost of living year-on-year — making it the main driver.

Inflation in October dropped to 6.45 percent from 6.91 a month earlier in what Kenya National Bureau of Statistics attributed to low food prices.