Unga price drop long way from five-year low of Kes35
The price of a one kilo tin (half gorogoro) of loose maize grain has more than doubled over the last five years to Kes76.42 in January up from Kes35.23 in a similar period in 2019 signaling marginal effect on the latest price drops in households.
Official data shows that inflation has eased slightly from December’s 9.1 per cent to 9.0 percent in January partly aided by decline in maize prices which traded at Kes77.4 at the time.
The marginal reprieve, however, is a far cry from what maize prices were five years ago before prices shot up 46 percent to Kes51.53 in 2020.
In January 2021, the Central Bank of Kenya (CBK) weighted maize flour instead of maize grain priced at Kes48.95.
Come 2022 the price of loose grains of maize had hit Kes56.73 before climbing by 34 percent to the current Kes76.52.
Grain prices in Kenya and the East Africa region have remained elevated over the past few years due to currency depreciation, production and marketing costs, and the impacts of Covid-19 and the war in Ukraine that disrupted fuel, fertilizer, and commodity supplies.
This has seen Kenya’s inflation bolt out of CBK’s upper 7.5 percent limit in June last year and has remained elevated over the last six months, peaking at 9.6 percent in October.
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CBK Governor Patrick Njoroge said food inflation accounts for more than half, 5.1 percent of the overall inflation with maize, wheat, edible oil and milk being the biggest drivers of the price surge.
Kenya National Bureau of Statistics data for January 2022 did not provide the price details of these inflationary hot points save for maize which gives an indication of what is moving household expenditure.
Kenya hopes duty free import of 900,000 metric tonnes of maize and 600,000 tonnes of milled rice over the next six months will help ease the cost of living.
“Imports of maize rice and sugar which have already been gazette to be imported duty free in the period February 1, to August 6. Bearing in mind what has been gazetted in terms of tonnes, maize what has been gazetted is like 27 percent of annual consumption and rice is about 39 percent of annual consumption and sugar is about 13 percent,” Dr Njoroge said during Monetary Policy Meeting press briefing this week.
“I am making the point that this will assert a downward pressure on prices but more generally on food inflation,” he said.
The assumption may, however, be challenged by the rise in global grain prices and depreciation of the Kenyan shillings which carries a risk of imported inflation.