13 March 2018

Kenya: Processors Use Powdered Milk to Bridge Deepening Supply Deficit

Processors are reconstituting powdered milk to bridge the deficit and maintain low current consumer prices following a decline in milk supply from producers.

Kenya Milk Processors Association chairperson Nixon Sigey said the volumes have dropped by 30 per cent, creating a shortfall in the factories.

Mr Sigey said major processors have about 5,000 tonnes of powdered milk, which is enough to last the country the next two months.

"There has been a 30-per cent decline in production and as such we have started reconstituting powder to meet the demand and maintain low prices for consumers," said Mr Sigey who is also the managing director of New KCC.

Mr Sigey said powdered milk have helped to maintain the prices at the moment with a 500ml packet selling at Sh50 on average compared with a high of Sh60 for the same quantity last year at the same time.

Statistics from the Kenya Dairy Board (KDB) indicate the decline that was registered last month is much bigger than what was witnessed in the same period in 2017. Data from the regulator indicate milk supply in February 2017 was down 11 per cent compared with 30 per cent dip last month.

KDB managing director Margret Kibogy said with the onset of the rains, they expect volumes to increase in the coming days.

"If the rains that have started will be consistent then we anticipate growth in production in the coming days," said Ms Kibogy.

Livestock Principal Secretary Andrew Tuimur said last month Kenya might have to remove duty on imported powdered milk to allow shipping in of the commodity at a cheaper cost following a decline in production across the country.

Milk imports attract a 60-per cent duty plus an additional seven per cent Dairy Board levy, making its importation a costly affair.

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