Unga shortage pushes October inflation to 2-month high


Unga shortage pushes October inflation to 2-month high

In Summary

  • According to the monthly published consumer price index (CPI) by the Kenya Bureau of Statistics, the food and non-alcoholic drinks index surged by 0.48 points as the price of several food stuffs rose significantly during the month.
  • Subsequently, the pre-harvest shortages have seen the price of a two-kilogram packet of sifted flour edge up past the Ksh.130 mark in the recent days from a near-term average of below Ksh.120 per pack.
  • Nevertheless, the inflation rate in October has fallen dead centre of the prescribed government range of 2.5 to 7.5 percent to contain any pent-up anxiety to the uncontrolled acceleration of consumer prices.

A notable rise in prices of major food commodities including maize grain and sifted maize flour saw October’s inflation rise to a two-month high 4.95 percent from a record low of 3.83 percent in September.

According to the monthly-published consumer price index (CPI) by the Kenya Bureau of Statistics, the food and non-alcoholic drinks index surged by 0.48 points as the price of several food stuffs rose significantly during the month.

“In October, prices of maize-grain loose, maize flour-sifted and tomatoes increased by 5.82, 4.58 percent and 4.44 percent respectively,” noted KNBS.

The hiked food index mirrors biting supply constrains as the country faces an acute shortfall of maize produce ahead of the expected harvests.

Subsequently, the pre-harvest shortages have seen the price of a two-kilogram packet of sifted flour rise past the Ksh.130 mark in the recent days from a near-term average of below Ksh.120 per pack.

Nevertheless, the inflation rate in October has fallen dead centre of the prescribed government range of 2.5 to 7.5 percent to contain any pent-up anxiety to the uncontrolled acceleration of consumer prices.

The downward revision of maximum pump prices for both petrol and diesel at the middle of the month has served to hold off further inflationary pressures as both the rise in transport and energy costs remain contained.

The Central Bank of Kenya (CBK) sustained open market operations (OMOs) during the month have similarly offered much needed stability in the forex exchange keeping the shilling’s valuation within the historical five-year average of between Ksh.101 and Ksh.104 against considerable liquidity pressures.

The impending harvest season is expected to offer some much needed intervention into rising food prices which featured as a sore thumb at the start of the year.

Food prices were at their lowest in September to see-off inflation at a record 17-month low 3.83 percent.

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Story By Kepha Muiruri
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