Wheat flour prices up on global shortage

Shoppers at a supermarket in Nyeri. file photo | nmg 

By GERALD ANDAE

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Summary

• Millers said they had been forced to adjust the price of flour to match with that of the world market, which has risen to $260 per tonne when it lands in Mombasa from $210 last month.
• The price of flour had registered a significant drop last month, declining by about Sh15 compared with last December when a two-kilogramme packet retailed at Sh130 on average.
• High global prices have been attributed to low supply of the commodity in the world market.

The price of wheat flour in the supermarkets has started going up following a similar increase in the international market of the commodity, where Kenya gets a third of its supplies.

Millers said they had been forced to adjust the price of flour to match with that of the world market, which has risen to $260 per tonne when it lands in Mombasa from $210 last month.

The price of flour had registered a significant drop last month, declining by about Sh15 compared with last December when a two-kilogramme packet retailed at Sh130 on average.

“International prices have gone up and it has now become expensive to acquire wheat at the international market,” said Nick Hutchinson, the chairperson of Cereal Millers Association (CMA).

High global prices have been attributed to low supply of the commodity in the world market.

A spot check in Nairobi supermarkets found a two-kilogramme packet of Golden flour had increased to Sh115 from Sh106 last month, Pembe to Sh115 from Sh108, Kifaru to Sh110 from Sh106 while Ndovu is currently trading at Sh110 from Sh108 while Ajab is retailing at Sh112 from Sh106.

READ: Wheat price records new high as farmers reduce production

Millers had last month attributed the decline in the price of the commodity to low demand from buyers. “There has been high competition from millers and this has seen them cut the price in order to outdo each other,” the CMA said last month.

The lobby group said given poor demand in the market, millers were trying to woo buyers through low pricing.

The increase is likely to put pressure on inflation as food takes up the largest share (36 per cent) of the basket of goods that is used to calculate inflation, making it the main driver of the cost of living. Last month, the inflation rate dropped to 4.46 per cent from 4.83 a month earlier, defying high cost of food commodities.

Kenya does not produce sufficient wheat locally and it relies on imports to meet the annual demand, bringing in two-thirds of its requirement to meet the annual consumption of 900,000 tonnes against the local production of 350,000 tonnes.