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Flood crisis will not hurt food production - survey

Seed prices labelled critical factor

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by MINAH MAHERO

Business12 June 2024 - 12:54
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In Summary


  • •Cereal products like maize listed among the key non-vegetable commodities expected to see a drop in retail prices starting June.
  • •Kenya National Bureau of Statistics Consumer Price Index and Inflation Rate report shows food inflation rose to 5.1 per cent in May, from 5 per cent in April.
Tomatoes growing in a greenhouse

The flooding occasioned by the March-May long rains will not heavily impact on food inflation and output, according to a Central Bank of Kenya survey.

The bank's May Agricultural Sector Report analysed data from retailers, wholesalers and select markets.

It gathers data on current and expected developments in prices and output of select agricultural commodities.

Farmers accounted for 52 per cent while retailers and wholesalers accounted for 35 and 13 per cent respectively of the total 268 respondents.

According to the survey main factors affecting output were seed prices leading with 87 per cent, followed by transport costs 77 per cent.

Others were weather conditions at 66 per cent while labour costs gathered lowest votes by respondents at 63 per cent.

Critical factors affecting sale of farm produce were price fluctuation from season to season and price distortion by middlemen.

Price fluctuations are common because farmers tend to harvest food at the same time therefore flooding the market with produce.

This in turn causes the prices to drop due to increased supply compared to demand.

In contrast during periods with shortages prices would increase due to the scarcity of the commodity.

The problem of price fluctuation is particularly severe for maize, tomatoes, green grams, cabbage and carrots.

The respondents also cited poor road network, long distance from markets, limited demand and competition from imports as other areas of concern.

Notably, a large portion of the respondents expected a general decline in food prices as well in overall food inflation over the next three months.

Cereal products like maize were listed among the key non-vegetable commodities expected to register a drop in retail prices starting June.

This was attributed to the increase in food supply across the country following the long rain season.

The challenges affect contract farmers less, since terms governing the engagement between the farmers and buyers are agreed upon in advance.

Additionally, the contract farmers do not incur transport costs as the buyers collect the produce directly from the farm.

A sharp dip in prices due to post-harvest flooding of the market can orchestrate huge loses to the farmer because they bear the highest risk.

This affects weather sensitive crops such as cabbages, potatoes, and tomatoes.

The latest Kenya National Bureau of Statistics Consumer Price Index and Inflation Rate report shows that food inflation rose to 5.1 per cent in May, from 5 per cent in April.

This put a stop to the three-month decline in the food inflation rate that began in February.

 

 

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