The Central Bank of Kenya has projected a possible decline in the prices of basic and essential commodities such as maize flour whose retail price is expected to reduce towards the end of the year.
The CBK in its latest Monetary Policy Statement, says that a survey of the agricultural sector indicated a possible reduction of prices of basic commodities, largely due to the anticipated bumper harvest by farmers.
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“The Survey of the agriculture sector conducted in the first half of September 2023 showed that the prices of key food items, particularly maize, were expected to decline further with the ongoing harvests in the main maize producing areas of the country,” CBK said.
The statement by the bank comes in the backdrop of a public outcry over the rising cost of living and that of commodities in the country all which have been linked to poor rains and the high taxes imposed by the government.
The country had also in September witnessed a spike in the price – one of the highest ever recorded in the recent past and which the government linked to the rise in international oil prices.
At the moment, the price of a 2kg packet of maize flour retails at about Sh180, a drop from between Sh220 and Sh200 in July.
Equally, CBK has also indicated that the food inflation rate had risen from 7.5% in August to 7.9% in September, a rise it argues was largely influenced by increases in the prices of a few key vegetables particularly onions, Irish potatoes, cabbages, spinach, kales (sukuma wiki), and tomatoes.
On the other hand however, the statement argues that the prices of key non-vegetable food items particularly maize and wheat flour declined following improved supply attributed to the ongoing harvests and government measures to zero-rate key food imports.
“Non-food non-fuel (NFNF) inflation remained stable at 3.7% in both September and August, reflecting the impact of monetary policy measures and muted demand pressures,” said the MPC statement.
Fuel inflation on the other hand, remained elevated at 13.1% in September, reflecting the impact of the rise in international oil prices.
Overall, the bank projects that inflation is expected to remain within the target range in the near term, supported by lower food prices with the improving supply of key food items particularly maize, and the implementation of government measures to improve the supply of sugar through imports.