Why vegetable prices are on the rise
Why vegetable prices are on the rise
The heavy rains that pounded Kenya since March are to blame for the rising cost of vegetables in the country. Speaking at the June 2024 Monetary Policy Committee Media Briefing on Thursday, June 6, the Central Bank of Kenya (CBK) Governor Dr. Kamau Thugge attributed the sharp price increases to supply disruptions between April and May 2024, caused by heavy rains during that period.
The governor explained that the adverse weather conditions hampered farmers' ability to distribute their produce, as the rains damaged roads and caused floods in several regions. This disruption also affected the prices of other commodities, such as spinach and sukuma wiki.
"Prices of onions rose by 67.7 per cent (year-on-year) in May 2024 and contributed 0.4 percentage points to overall inflation from 0.5 percentage points in April.
"Prices of tomatoes rose by 29.7 per cent (year-on-year) in May 2024 and contributed 0.4 percentage points to overall inflation from 0.1 percentage points in April," read the report in part.
Currently, medium-sized tomatoes and onions are retailing between Kes15 and Kes20 across major towns and markets in the country. Conversely, some commodities saw a price decline in May, including sugar, which had experienced a sharp price increase last year.
Prices are expected to further decrease in June and the following months due to the resumption of operations at sugar factories.
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"Domestic sugar prices continued to moderate from the peak levels witnessed in mid-2023, reflecting improved supply, with the re-opening of sugar factories from October 2023 after shutting down for maintenance.
"The implementation of government measures to improve the supply of sugar through imports continues to moderate prices. Globally, sugar prices have continued to moderate with improved supply, particularly from Brazil," Thugge stated.
Furthermore, Dr. Thugge has downplayed the likelihood of further fluctuations in the Kenyan Shilling despite its recent rebound against the United States Dollar. He projects that the exchange rate would remain stable, attributing the Shilling's performance to market dynamics and noting that the Central Bank would intervene only when necessary.
“We don't see significant weakening or significant strengthening, there should now be stability in the exchange rates,” he reiterated.
He noted that the exchange rate level would ultimately be determined by the ongoing inflow and outflow of foreign exchange.
“We will intervene when there is a need to, if there is excessive volatility on either side, but we will let the market determine that and we will see how the current, capital and financial accounts perform," the CBK Governor assured.
