Retail prices of most food items saw a decline in September compared to August, according to the latest Agriculture Sector Survey by the Central Bank of Kenya. Key items such as sugar, fresh packaged milk, wheat flour, maize grain, and maize flour recorded price drops, offering some relief to consumers. However, prices for certain staples like beans, cabbages, and potatoes saw an increase.
The drop in prices of cereals and cereal products was largely attributed to a bumper harvest, supported by favourable rainfall during the October-December 2023 and March-May 2024 rainy seasons. Looking ahead, a larger proportion of surveyed respondents expected further price declines in non-vegetable food items, particularly processed products like sugar, maize flour, and wheat flour. However, they anticipated price hikes for green maize and most fresh vegetables, such as spinach, kales (sukuma wiki), and traditional vegetables, due to seasonal factors.
The survey also showed optimism about overall inflation. A majority of respondents expected inflation to remain steady or even decline, as the harvest season was underway in key agricultural regions like the Rift Valley and Western Kenya. Specifically, 63% of respondents anticipated a decrease in food prices over the next month, while 54% believed inflation would either remain unchanged or drop, buoyed by increased food supply, a stable exchange rate, and stable fuel prices.
Farmers expressed optimism about the next harvest, with expectations of increased acreage and output, particularly for vegetables like kale, spinach, and cabbages. Many farmers credited the favourable rainfall for boosting water tables, which benefited those relying on borehole irrigation. The availability of subsidized fertilizer also played a critical role, with 68% of farmers reporting access to the program, up from 60% in July. These farmers noted a positive impact on their crop yields, thanks to the reduced input costs.
For the first time, the September survey also gauged respondents’ expectations for the agricultural sector’s overall performance. Most farmers expected the sector to either remain stable or improve, pointing to the continuation of government support programs like the fertilizer subsidy and the anticipation of sufficient rainfall in the upcoming October-December 2024 season.
With the end of protests in June and July, confidence in the economy has also rebounded. Farmers are optimistic that output will continue to rise, driven by above-average rainfall in 2023 and early 2024, along with sustained government interventions to lower input costs. The favourable weather conditions have created ideal conditions for cultivating key crops such as maize, beans, tomatoes, onions, potatoes, and carrots. Farmers relying on irrigation are also hopeful that the increased water table will reduce the cost of pumping water from boreholes, further supporting their agricultural efforts.
In sum, the survey paints an optimistic picture for the agriculture sector, with expectations of higher yields and stable inflation in the months ahead.
