The latest Agriculture Survey of March 2024 has forewarned consumers of an impending surge in the prices of staple foods such as rice, potatoes, and tomatoes over the next month.
The survey, released on Tuesday, April 9, paints a picture of mixed outcomes in the retail market, with some commodities experiencing declines while others remain elevated.
Despite the overall expectations of a decline in retail prices, certain items such as potatoes, onions, and tomatoes are expected to see increases, albeit at a subdued pace compared to previous forecasts.
The report noted, “However, only 60 per cent of respondents expected an increase in onion prices in the March survey compared to 70 per cent in the February 2024 survey.”
Additionally, prices of cooking oil and cooking fat are expected to marginally decline in April 2024, attributed to easing international prices of edible oils.
Transport costs, weather conditions, input prices, and labour costs were identified as dominant factors, though the proportion of farmers citing all four factors declined slightly compared to previous surveys.
"The reduction in the share of farmers citing transport costs and weather conditions as key challenges could reflect the relatively lower fuel prices and supportive weather conditions in March 2024," the report noted.
According to the survey, there were notable declines in the prices of various types of maize flour in the first quarter of the year, attributed to increased production following favourable rainfall in 2023.
A two kg packet of maize flour is retailing for between Ksh130 to Ksh170 at the moment, down from highs of Ksh210 in January.
However, prices of tomatoes, potatoes, and onions have remained high due to higher demand compared to supply. The survey indicates that despite a slight decrease in expected price increases for onions, the overall outlook remains elevated, driven by both local and regional demand.
"Onion prices remained elevated as observed in both February and March 2024 surveys, and respondents expected a further increase in April 2024," the report stated.
Adding, "However, the impact of the harvest on prices was expected to be dampened by the high demand for onions both locally and within the East Africa Community (EAC) region."
The survey also highlighted a marginal decline in sugar prices, which have been moderating since October 2023 following the resumption of operations by local sugar companies.
“The price of sugar has been declining gradually and was lower in March 2024, compared to February 2024, with some outlets posting prices of about Ksh 330 per 2kg packet,” noted the report.
Expectations point to further declines, buoyed by the reopening of local sugar factories and a global decrease in sugar prices.
Optimism about economic performance in the upcoming months was relatively higher among respondents, attributed to the recent appreciation of the Kenyan shilling, expectations of sustained government initiatives such as subsidised fertiliser, and favourable weather forecasts for the March-May 2024 long rain season.
The survey conducted by the Central Bank of Kenya between March 11 and March 15, 2024, highlighted a general decline in food prices relative to February 2024, with expectations pointing towards further decreases in April 2024.
However, concerns linger over elevated prices of tomatoes and onions, driven by persisting demand-supply imbalances.
The key factors exerting upward pressure on inflation, namely transport and input costs, remain significant but have seen a slight decline in reported impact, attributed to government interventions and favourable weather conditions.
Additionally, the survey noted a substantial increase in the uptake of subsidised fertiliser among farmers, indicating positive strides towards increased productivity and food security.
