Consumers have to dig deeper into their pockets to enjoy chapati this Christmas. This is due to a sharp increase in the price of wheat flour.
This is attributes to a 32 percent increase in the price of wheat in the international market since January.
A two-kilogram packet of flour is now retailing at an average of Sh135. It is the highest price in the last one-and-a-half years.
Wheat flour is a staple of many Kenyan homes over the Christmas period.
The price of a tonne of wheat has gone up from $525 in July to $575 in December. Therefore it is impacting Kenya’s prices. Kenya is a wheat deficit country. It relies on imports to close the domestic supply gap.
The highest price of wheat was recorded this year in October at $625 for a tonne.
That price has informed the current high flour prices as millers make shipment orders three months in advance.
Wheat prices in the world market have been on an upward trend since June. The current consumer cost does not match our current wheat purchase price,” said Mr. Rajan Shah. He also signaled that the cost may rise further.
Cost affects consumers
The rising cost of wheat flour adds an expensive shopping basket for consumers. This is as prices of other basic items such as milk and sugar have gone up.
For instance, a 500-milliliter packet of milk has risen from Sh50 previously to Sh55. This is due to processors justifying the increase in the shortage of the commodity in the market.
The rising cost is likely to spark a new increase in cost of living. This is due to having inflation jumping to a six-month high of 5.33 per cent in November. It largely increases due of transport, electricity and food prices.
Millers now want the government to stop fixing the price of wheat and instead subsidize farmers through inputs. Also, market forces should determine the buying price.
The government has been fixing the cost at which millers buy wheat, with processors arguing. This move has a negative impact on consumer price.
It projects that farmers will harvest three million bags which is an improvement comparing to last year’s yields.