Half-litre packet of milk hits a record Sh65 high

Milk processing at Brookside dairy factory in Ruiru. PHOTO | JEFF ANGOTE | NMG 

By GERALD ANDAE

More by this Author

Summary

• Prices increased from an average of Sh45 in January to the current Sh60 marking one of the worst escalations of fresh milk cost.
• The price increase has been precipitated by a drought that has seen the volumes of milk drop by over 50 per cent.
• New KCC recently raised the producer price of raw milk from Sh40 to Sh43 per litre as competition in the market heated up.

The price of 500ml packet od fresh milk has registered a record high, crossing the Sh60 mark in major supermarkets. This has piled inflationary pressure on households.

Prices increased from an average of Sh45 in January to the current Sh60 marking one of the worst escalations of fresh milk cost in recent years.

The price increase has been precipitated by a drought that has seen the volumes of milk drop by over 50 per cent in the past three months.

“We have never seen the prices of fresh milk go beyond Sh60 in the dairy industry,” said a supermarket attendant who is not allowed to be quoted yesterday.

He said supplies have gone down sharply with processors not meeting all the orders placed.

The price of a half litre packet of Ilara is currently retailing at Sh65, Tuzo Fresh Sh62 and Molo fresh Sh60 with KCC fresh selling at Sh55 at major retail outlets.

Milk, which falls under the national food basket is a key driver of inflation.

The rising cost of food items including maize flour April pushed the cost of living to a 57-month high, according to the latest data by the Kenya National Bureau of Statistics (KNBS).

Numbers released on Friday showed inflation increased from 10.28 per cent in March to 11.48 per cent in April – the highest rate since May 2012.

Food prices have been on the rise since last year pushing inflation outside the government’s preferred ceiling of 7.5 per cent. Food takes up the largest share (36 per cent) of the basket of goods that is used to calculate inflation.

Processors are currently reconstituting powder milk into fresh milk to maintain supply. New KCC and Brookside had over 1.2 million kilogrammes of the product, which has been significant in supplementing the limited stocks coming from farmers.

New KCC recently raised the producer price of raw milk from Sh40 to Sh43 per litre as competition in the market heated up.

This makes the firm the highest paying processor in the followed by Brookside, which is offering farmers Sh42 per litre. It is hoped the onset of the delayed long rains could change the producer and consumer price situation in the next few weeks though.