The survey’s Balance of Opinion (BOO) on expected price changes showed a near-equal split between respondents predicting price increases and those anticipating declines. Overall, the BOO suggests that most food prices will experience a slight decline in December, with a few items, such as tomatoes, expected to see higher prices due to seasonal factors. Tomato prices, for example, are likely to rise due to reduced supply during the October-December rainy season, as supply typically decreases in the wet season and rises when dry conditions return
The retail prices of several food items declined in November 2024 compared to October, though there were notable price increases in maize flour, wheat flour, sugar, and certain vegetables such as spinach and sukuma wiki, according to the Central Bank of Kenya’s Agricultural Sector Survey.
The survey indicated a general decline in the prices of various staple foods, including different types of rice, maize grain (loose), green maize, green grams, fresh un-packeted cow milk, cabbages, and onions. However, the prices of some processed food items and select vegetables saw an uptick, particularly sugar, wheat flour, maize flour, and greens like spinach and sukuma wiki.
Looking ahead to December 2024, the survey’s Balance of Opinion (BOO) on expected price changes showed a near-equal split between respondents predicting price increases and those anticipating declines. Overall, the BOO suggests that most food prices will experience a slight decline in December, with a few items, such as tomatoes, expected to see higher prices due to seasonal factors. Tomato prices, for example, are likely to rise due to reduced supply during the October-December rainy season, as supply typically decreases in the wet season and rises when dry conditions return.
Other food items expected to see price increases in December 2024 include beans, green grams, green maize, loose maize grain, and garden peas, again due to seasonal fluctuations.
Stable Prices Expected for Rice and Milk
Rice and milk prices are expected to remain stable, with a slight downward bias for rice. Rice has seen stable pricing for over two years, bolstered by both domestic production and imports. Milk prices have also remained relatively stable due to favourable weather conditions that have supported pasture growth, as well as imports, especially from Uganda. Respondents in the survey largely expect these two commodities to maintain their current price levels.
Sugar, Cooking Oil, and Fat to See Price Hikes
Conversely, the BOO pointed to expected price increases in sugar, cooking fat, and cooking oil (salad), driven by rising global market prices for these products.
Inflation Expectations Remain Low Despite December Uptick: In addition to food price projections, the November 2024 survey also gauged respondents’ views on overall inflation in the economy. Despite an anticipated uptick in prices during December, the majority of respondents expect overall inflation to remain stable or decrease over the next three months. This outlook is primarily attributed to favourable weather conditions leading to increased food supply, expectations of a stable exchange rate, and the moderation of fuel prices.
Positive Outlook for Agricultural Sector Performance
The survey also revealed positive expectations for the agricultural sector, with most respondents optimistic about increased acreage and output of key food items. This optimism is driven by favourable weather conditions and the continuation of government interventions, such as subsidized fertilizer. In fact, 85% of surveyed farmers identified inorganic fertilizer as the most critical input for production, followed by pesticides and herbicides (54%).
Over half of the sampled farmers reported having accessed subsidized fertilizer, with most of them reporting positive impacts on their output.
Increased Optimism for Agriculture and Economic Performance
Optimism regarding the agriculture sector’s performance significantly improved in November 2024 compared to September 2024. The proportion of respondents expecting agricultural performance to either remain unchanged or improve over the next three months rose to 87%, up from 78% in September. Likewise, the outlook for the next year improved, with 81% of respondents expecting agricultural performance to remain stable or improve, compared to 76% in September.
There was also a noticeable increase in optimism about the overall economic performance, driven largely by expectations for positive agricultural outcomes. While the outlook for the economy one year ahead remained unchanged, 71% of respondents expected the economy to improve or remain stable, the same as in September.
In summary, while November 2024 saw a decrease in the prices of many food items, there were still significant price increases in some key commodities. Optimism about the agricultural sector and overall economic performance has risen, with favourable weather and government support playing a crucial role in driving expectations for future growth.
