CBK projects rise in maize flour, cooking oil prices amid agricultural gains
KENYA – The Central Bank of Kenya (CBK) has released its latest Monetary Policy Meeting Report, forecasting a rise in cooking oil prices over the next three months.
Published on December 9, 2024, the report attributes this anticipated increase to elevated global market prices. Given Kenya’s heavy reliance on imports for raw materials in cooking oil production, domestic prices are expected to mirror global trends.
The report also indicates potential increases in maize flour prices. Findings from the November 2024 Agriculture Survey suggest moderate upward pressure on prices for certain cereals, including green maize, due to seasonal factors.
This underscores the influence of both seasonal changes and international market conditions on the pricing of essential food staples in Kenya.
This comes after a report by the Kenya National Bureau of Statistics (KNBS), recently revealed that maize flour, a cornerstone of the Kenyan diet, is experiencing sharp price increases, adding to the financial strain on households.
This trend coincides with an uptick in the country’s inflation rate, which rose to 2.8% in November 2024 from 2.7% in October.
KNBS reports that sifted maize flour prices have increased by 5.1%, fortified maize flour by 4.9%, and loose maize flour by 2%.
Despite these concerns, the CBK report offers a more optimistic outlook for other food prices. The majority of survey respondents anticipate that inflation will either remain stable or decrease in the coming quarter.
Contributing factors include improved food supply from ongoing harvests, favorable weather conditions, stable fuel prices, and a steady exchange rate, all of which are expected to help stabilize or reduce food prices.
In 2023, Kenya’s maize production experienced a significant boost, increasing by 38.8% from 34.3 million bags in 2022 to 47.6 million bags. This surge is attributed to improved weather conditions and government interventions aimed at enhancing food security.
Looking ahead, projections for 2024 are even more ambitious. The Ministry of Agriculture forecasts maize production to reach 75 million bags. Agriculture Cabinet Secretary Andrew Karanja has announced plans for the government to purchase 1 million bags at KES 3,500 (US$24) per 90-kilogram bag, a move amounting to a total of KES3.5 billion (US$24.5 million).
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