Naivas cuts milk price on rise in market supply

Money Markets

Naivas is selling a litre at Sh65 down from Sh70 following increased supply. PHOTO | FILE 

By GEORGE NGIGI

Naivas Supermarket has lowered the price of milk dispensed through vending machines, putting pressure on milk processors to follow suit.

Naivas is selling a litre at Sh65 down from Sh70 following increased supply. Milk processors have, largely retained prices with half-litre packs still retailing at as high as Sh50.

“There were rains in April and May so there is grass and the milk supply has improved. The informal sector is more competitive than the processors; it responds faster and reflects the true state of the market,” said John Wachira, secretary-general of Dairy Farmers Association.

Milk prices shot up in February following a drop in supply. Data from the Kenya National Bureau of Statistics (KNBS) show deliveries to processors declined from 42.4 million litres in February to 30.1 million litres in April.

Kenya’s dairy sector is dominated by two milk processors; privately-owned Brookside and the government’s New KCC.

Attempts to speak to New KCC and Brookside top management were fruitless.

KNBS figures show that in the first four months of the year, the volume of milk delivered to processors reduced by 22 per cent compared to a similar period last year.

The informal sector had received 150.2 million litres as at the end of April this year compared to 194 million litres in a similar period last year.