22 January 2013

Kenya: Milk Prices Maintain Upward Trend As Supply Drops

MILK prices have increased again by between Sh3 and Sh5 due to low supplies from dairy farmers especially in the North Rift, processors and traders have said.

A half a litre packet of milk has been retailing at Sh43 or Sh45 since Friday depending on the brand. This is the second price increase in a month after festive season demand pushed up prices from Sh35 to Sh40 in December.

"Milk prices are responding to the usual market forces of demand and supply. Currently, we are meeting our market requirements, but if current trends continue, demand may soon outstrip supply," said Brookside Dairy's general manager John Gethi in a statement yesterday.

Kenya Dairy Traders national administrator Alex Gathii said the dry spell has started and may run up to April thereby affecting production.

"In North Rift, farmers are shifting from dairy farming to normal farming. So there is a little problem with production there even though in Central region the supply is normal," said Gathii.

New KCC chairman Matu Wamae said the latest increase was due to high demand as well as high cost of inputs that has forced processing firms to pay farmers more for their supplies to ensure they keep on with the production.

"Now we have to pay farmers over Sh35 per litre when before we were paying them below Sh30. Also milk has been stable for the last five years even as other items like bread and sugar prices have been rising. Inflation has finally caught up with us also," said Wamae.

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