Households will continue digging deeper in their pockets to afford a meal of ugali, rice or even chapati as cereal prices cease to ease on high inflation.
According to the latest market monitor by Food and Agriculture Organisation (FAO), the April edition covering the month of March, cereal prices closed the month higher than two weeks before.
The agricultural and cereal price indices closed the month two per cent higher, and export price index three per cent higher, meaning costlier imports with the pressure passed on to consumers on hiked commodity prices.
“Prices of all three cereal products increased, with maize, wheat and rice closing the month at three per cent, two per cent and one per cent higher, respectively, than two weeks ago,” FAO says.
However, on a year-on-year basis, maize and wheat prices are 15 per cent and 37 per cent lower, respectively, whereas rice prices are 16 per cent higher.
Maize and wheat prices are 26 per cent and seven per cent higher respectively, while rice prices are five per cent lower compared to the period before Covid-19.
The organisation notes that cereal prices are still above the pre-shock levels, mainly occasioned by the biting inflation being witnessed across almost all low- and middle-income countries.
Inflation levels are above five per cent in about 83 per cent of low-income countries and 93 per cent of lower-middle-income countries.
In Kenya, inflation stood at 9.2 per cent as of March, according to the Kenya National Bureau of Statistics (KNBS).
The mark is way above the statutory requirement of 7.5 per cent, putting further pressure on households as the cost of living keeps rising.
The inflation-driven cereal prices are despite the gradual decline of food commodity prices globally, the organisation says in part.
"The benchmark index of international food commodity prices declined for the eleventh consecutive month in February this year, mainly on the back of Black Sea Grain Initiative implemented to safely transport grain and foodstuffs from Ukrainian ports to importer countries like Kenya,” FAO says.
With the renewal of the Black Sea Grain Initiative on March 18, 2023, FAO says there is hope for continued recovery from the food price shocks of the past year.
However, it suggests that further measures must be taken to ensure net food importing countries receive sufficient supplies of food at affordable prices.
"There are still many bottlenecks hindering the full potential of the deal, including a slowdown of ship inspections and high insurance costs,'' FAO says.
Source: The Star