Kenyans are grappling with an expensive breakfast after processors raised the price of milk just days after the cost of sugar went up, a move likely to spark inflation.
All processors have increased the cost of milk by between Sh3 and Sh5 for both fresh and long life brands, citing high producer prices in the market.
New Kenya Cooperative Creameries managing director Nixon Sigey says that whereas the price paid to farmers increased in March last year, the cost to consumer remained the same.
“Farmers prices increased from Sh33 in March 2020 to Sh45 currently. For a long time consumer prices remained at Sh45-Sh50 per packet depending on the brand,” said Mr Sigey who is also the chairperson of Kenya Dairy Processors.
Consumers are now buying a 500ml packet of milk at Sh60 from Sh55 previously for long life and Sh55 for fresh type following the new adjustment by processors.
Kenya’s year-on-year inflation rate inched up to 6.57 percent in August from 6.55 percent a month earlier on the back of an increase in cost of food.
This is the first time in over a year that processors have increased the price of the commodity to consumers.
The increment comes just days after the cost of sugar went up by Sh30 for a two kilogramme packet in retail shops in what the state has attributed to interruptions at the mills.
Chemelil and Kibos sugar mills broke down, leading to a huge backlog of cane to be processed in what has impacted on total stocks in the country.
The cost is even higher in estate shops where a kilo of loose sugar is selling at a high of Sh240 for a two kilo packet from Sh200 previously.
In January, Kenya Dairy Board said high prices will prevail for some time because of higher producer cost that processors are paying farmers, while the manufacturers had issued a warning that the price will go up in the event they experience a shortage in supplies.
Processors increased the producer price of raw milk by more than double since March last year, following a decline in supply.