Drought shrinks New KCC milk powder output 74 pc

A worker at a New KCC factory. FILE PHOTO | NMG 

By GERALD ANDAE

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Summary

• The volume of powdered milk dropped from 3.8 million tonnes in the last financial year to a million tonnes in the fiscal year ended June.
• This was attributed to a severe drought that affected most parts of the country starting October last year.
• Processors normally halt processing of powder if they do not get enough supplies as they commit all the milk that receive in production of fresh commodity.

New KCC registered a 74 per cent decline of powdered milk production in 2016/2017 financial year, highlighting the serious shortage of milk that saw consumers pay record price for the commodity.

Data filed by the processor with the Kenya Dairy Board (KDB) indicates the volume of powdered milk dropped from 3.8 million tonnes in the last financial year to a million tonnes in the fiscal year ended June.

The drop was attributed to a severe drought that affected most parts of the country starting October last year.

“This is a very huge decline of powdered milk produced. It is an indicator that there was a serious shortage of milk in the market,” said KDB managing director Margaret Kibogy.

The figures show the State-owned firm produced 2.3 million tonnes of powder in 2015 and the figure jumped to 3.8 million tonnes last year before dipping to a million tonnes in the fiscal year that ended in June.

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Processors normally halt processing of powder if they do not get enough supplies as they commit all the milk that receive in production of fresh commodity.

“Powdered milk is only processed when there is a surplus from producers. Last year there was none in the market due to low volumes from farmers and that impacted negatively on the production,” she said.

Treasury Cabinet Secretary Henry Rotich in May removed duty on imported milk to ease the shortage that had resulted to a sharp rise in consumer prices.

Milk had risen to an all-time high of Sh65 per half a litre packet following one of the longest dry spells recorded in the recent past. Processors cut the price in May after a marginal increase in production.

The drop saw the price of a half-litre packet of Ilara reduce to Sh55 from Sh65, Tuzo Fresh to Sh52 from Sh62 and Molo fresh to Sh50 from Sh60 with KCC fresh selling at Sh50 down from Sh60 at major retail outlets.

READ: Fresh milk prices fall by Sh10 on duty-free powder imports, more supplies