Why Families Pay More for Maize Flour

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Why Families Pay More for Maize Flour

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Business Daily (Nairobi)

May 23, 2008

News Article By Allan Odhiambo

A bloated food bill awaits Kenyan households following a steady rally in prices of key commodities over 2007, a latest economic survey shows.

The Planning ministry said production of the country's main staple food, maize, dropped by 6.1 per cent to 32.5 million bags compared to 2006 effectively pushing up the value of marketed consignments of the commodity.

The value of marketed maize hit the Sh8 billion mark having increased by 11 per cent the previous year.

"This decline is associated with delay of long rains and low volume of short rains received," the Planning ministry said in an Economic Survey for 2008 released yesterday.

This trend of increased prices is expected to continue this year because of the violence witnessed in key producing areas following the disputed December 2007 presidential election results. An estimated 3.8 million bags of the commodity are believed to have been destroyed during the skirmishes in the first two months of the year.

Overall, the survey said, the sector continued to post an impressive performance over 2007 despite hitches such as unfavourable weather conditions that slowed its growth to 2.3 per cent compared to 4.4 per cent in 2006.

Prices of commodities recorded mixed performances with prices of tea and coffee taking a dip while those of maize, wheat, milk and sugarcane taking on a climb.

The value of marketed production hit Sh175 billion in 2007 having risen 18 per cent - indicating the huge pressures on consumers seeking supplies, especially the foods. The value of marketed cereals peaked at Sh15 billion last year having risen 12 per cent.

Horticulture was the biggest beneficiaries in terms of earnings taking home some Sh65.2billion in 2007 compared to Sh43.1 billion the previous year. Coffee production increased by 11 per cent to 53,000 tonnes; tea exports dropped to Sh46.8 billion.

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