Rising Food and Transport Costs Set to Squeeze Household Budgets in the Coming Months

Families may soon feel greater pressure on their monthly budgets as food prices face renewed upward pressure. Prolonged dry weather in agriculture and ongoing international conflicts are threatening local food supplies and pushing up transportation costs.

According to findings from the latest Central Bank of Kenya (CBK) agriculture survey reported by Business Daily, market actors across the supply chain are bracing for cost increases on essential household staples.

Key kitchen staples affected by price hikes

The survey of farmers, wholesalers, and retailers revealed rising concern over several daily necessities that form the backbone of family meals:

• Milk: About 67 per cent of surveyed firms expect the price of fresh unpacketed milk to rise, up sharply from 11 per cent in August. According to Kenya National Bureau of Statistics (KNBS) data cited by BD, fresh packeted milk averaged Sh61.23 per 500ml in September, up from Sh55.97 a year earlier, while unpacketed milk reached Sh77.54 per litre.
• Maize flour: Expectations of price increases for sifted maize flour jumped to 40 per cent in September, compared to 19 per cent the previous month.
• Wheat flour and cooking oil: Expectations of rising prices for white wheat flour climbed to 48 per cent (up from 29 per cent), with two-kilogram packets averaging Sh181.11. Cooking oil prices reached Sh359.36 per litre.
• Sugar: Price hike expectations for sugar nearly doubled, rising from 15 per cent to 28 per cent.

Fresh produce has also seen mixed trends. While prices for items like spinach, tomatoes, and onions moderated, everyday staples such as cabbages, unpeeled garden peas, green maize, and loose maize grain experienced price increases.

Why household expenses are rising

Family grocery bills are being impacted by a combination of domestic climate conditions and international trade disruptions:

1. Prolonged dry weather: Drought conditions in primary food-producing areas have restricted crop yield and milk output. A sweeping 97 per cent of survey respondents cited weather as a primary driver of current price shifts.
2. Global conflicts and fuel prices: The Middle East conflict has significantly impacted retail prices by driving up global oil prices and disrupting shipping routes around the Strait of Hormuz.
3. Transport and input costs: Higher fuel costs directly translate to increased transport fees for delivering produce to urban markets. Additionally, expensive farm inputs continue to push up the initial cost of production.

Overall, 64 per cent of survey respondents expect near-term inflation to rise further.

Hope on the horizon for future harvests

While near-term pressures remain high, there is potential relief ahead for family meal planning. Approximately 76 per cent of surveyed farmers and traders anticipate better harvests in the coming year, provided the October-to-December rainy season delivers the expected above-average rainfall.

Until then, households are advised to plan budgets carefully as supply chains navigate these weather and geopolitical headwinds.

For more, click HERE to join our WhatsApp channel!