Bread, rice, onion prices projected to rise even before new taxes
The Central Bank of Kenya’s May Agriculture Sector Survey reveals that most Kenyans expect price hikes in bread, wheat, and rice ahead of new taxes. Despite April’s heavy rains promising a good harvest, prices for essentials like non-aromatic white rice (projected to rise by 40% to Sh657 for 2kg), bread, and wheat products are anticipated to surge. However, prices for maize and vegetables are expected to fall. Kenya’s inflation rate stands at 5.1% .
Majority of Kenyans expect the price of bread, wheat and rice to increase even before the new taxes kick in next month according to a new Centra Bank of Kenya survey.
The Agriculture Sector Survey for May shows that Kenyans are concerned about a possible rise in prices of some food commodities despite the expected good harvest following the heavy rains in April.
CBK says Kenyans are foreseeing a rise in the cost of items such as non-aromatic (unbroken) white rice, white bread, brown bread, aromatic white rice, wheat flour (both white and brown) and green maize.
This has been attributed to the high rains which in some areas is already affecting retail prices of tomatoes, cabbages, traditional vegetables, spinach, kales/sukuma wiki and peas edged up following excess rainfall in key source regions, notably Narok, Nyandarua and Laikipia.
On a positive note the survey points out that Kenyans expect, on balance, substantial declines in prices of loose maize grain, loose maize flour, sifted maize flour and fortified maize flour in June 2024.
“Kenyans however expected some increase in rice prices reflecting the adverse impact of excess rainfall/flooding on domestic production. They also expected bread prices to increase on account of expected adverse impact of flooding on domestic wheat production,” reads the CBK report.
The survey mentions rice as the major food item whose prices will shoot by nearly 40 per cent this month.
On average a two kilogram non aromatic white rice was retailing for Sh469 in May. A 40 percent rise will see the cost hit Sh657.
Other wheat products such as bread are also expected to rise due to the impact of flooding on domestic wheat production.
CBK undertook the survey to gather information on current and expected development in prices of food items to inform monetary policy decisions.
In the survey, prices of vegetables, milk and sugar are also expected to decline. However, farmers noted that onion prices would remain elevated in June.
Albeit, some respondents opined that the high cost of onions would incentivise farmers to produce more onions and hence lead to a decline in prices.
For sugar prices, the respondents expected that the drop would be of a minimal margin as the commodity had already declined from high levels and would likely stabilise.
Data from the Kenya National Bureau of Statistics (KNBS) showed that a kilo of sugar dropped from Sh209.55 in January to Sh172 in May 2024.
In general, 57 per cent of respondents anticipated a decrease in inflation rate in the next three months against 43 per cent who expected an increase. The inflation rate in May stands at 5.1 per cent, according to KNBS.
Source Link : https://www.the-star.co.ke/business/kenya/2024-06-14-bread-rice-onion-prices-projected-to-rise-even-before-new-taxes/
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