Tough November ahead as food prices push October inflation to 6.9%

Increased food prices continue to bite into Kenyans’ pockets as inflation increased slightly for the second consecutive month to 6.9 per cent last month.

This after easing below the statutory level to 7.3 per cent in July. August recorded 6.7 which then increased to 6.8 per cent in September.

Food prices in the country have continued to put households under pressure and raised the cost of living.

According to Kenya National Bureau of Statistics (KNBS) data, the price changes in food, energy and transport, which cover about 57 per cent of household budgets, were major contributors to the inflation levels.

“Food and Non-Alcoholic Beverages Index increased by 1.3 per cent between September 2023 and October 2023. The rise in food inflation is mainly attributed to the increase in prices of some food items, which outweighed the decrease in prices of other foodstuffs,” KNBS said in a statement.

Notably, prices of potatoes, tomatoes and oranges increased by 9.6, 5.4 and 2.8 per cent to retail at Sh111.59, Sh81.46 and Sh81.75 per kilogramme, respectively.

However, prices of sifted maize flour, fortified maize flour and wheat flour-white decreased by 4.1, 3.2 and 0.8 per cent to retail at Sh172.50, Sh195.21 and Sh189.55 per 2kg, respectively.

The housing, water, electricity, gas and other fuels index went up by 1.9 per cent in the month under review.

“This was mainly due to increase in the prices of gas, electricity of 200 kWh, 50 kWh and kerosene, which increased by 7.3, 5.0, 3.3 and 1.2 per cent, respectively,” KNBS adds in part.

Transport Index increased by 1.5 per cent mainly attributable to the rise in prices of petrol and diesel by 2.7 per cent and 2.2 per cent, respectively.

Compared to last year, same period, all sectors have recorded price increases with commodities under transport increasing by 13.6 per cent; and housing, water, electricity, gas and other fuels by 7.8 per cent.

On the other hand, food and non-alcoholic beverages have recorded a 7.8 per cent increase since October last year.

Continued weakening of the shilling is also expected to spike the cost of goods as Kenya remains a net importer.

The shilling is expected to remain weak with projections of further drops in the medium-term, amid persistent forex demand from importers, as well as the impact of high global inflation.

The Central Bank of Kenya yesterday quoted the shilling at 150.55 against the dollar, meaning it has shed about 24 per cent of its value year-to-date.

A volatile shilling means importers will be spending more in bringing in goods as raw materials for factories, thereby raising the cost of inputs for firms, and the burden passed down to consumers.

In this case, an importer will now spend an extra Sh24 to buy a dollar for imports compared to the same period last year.

Since early 2020 when it started depreciating, the shilling has lost a value of about 51 per cent.