Food prices are expected to rise over the next three months as the effects of the depreciating shilling continue to be felt.
According to research by the Central Bank of Kenya conducted among agricultural stakeholders in January, it was revealed that food inflation is expected to increase over the next three months.
The stakeholders detailed in the report that the costs of importing food had surged, and they anticipated that these additional expenses would ultimately be transferred to consumers.
The stakeholders revealed to CBK that the importation costs had resulted from the weakening shilling.
Given that imports are transacted in dollars, the weakening shilling makes it more expensive to bring food items and other products into the country.
The dollar is currently trading at an average of Ksh162.
"The Survey of the Agriculture Sector conducted ahead of the MPC Meeting revealed that respondents expected inflation to increase in the next three months, on account of high import costs, partly due to the depreciation of the exchange rate," CBK detailed in its Monetary Policy Committee report.
Kenya primarily imports food items to fulfil the growing demand for these products. Importation also serves to complement local production.
Some of the imported food items expected to be affected by the weakening shilling are cooking oil, sugar and rice.
Notably, the country has experienced a decline in the production of rice for the better part of 2023 which means that importers will prioritise its importation to match the deficit.
"The price of rice remains sticky due to reduced domestic production occasioned by high input costs, and an increase in the cost of importation of the commodity," read the November 2023 Agriculture Survey.
Other vegetable items which are imported include onions which mostly come from Tanzania.
Tanzania onions are reported to be drier and have a better shelf life than those harvested locally.
