Prices of basic food commodities in most low and middle-income countries are remain despite the decline in agricultural commodity prices over the past 12 months, according to the World Bank.
In its latest food security update covering February-May, the lender says inflation levels have remained elevated, higher than five per cent in about 67 per cent of low-income countries and 81 per cent of lower-middle-income countries.
“African countries are among the most affected with food price inflation, which exceeds the overall inflation in most of the surveyed countries,” say the World Bank says.
Kenya’s inflation stood at eight per cent in May, marking twelve months in a row the year-on-year cost of living measure crossed the upper limit target of 7.5 per cent.
The country’s food inflation according to the lender, stood at 10.3 per cent in May, up from 10.2 per cent the previous month.
It had hit a 7-year high of 15.8 per cent in October last year, a mark last witnessed in 2017.
According to the lender, the country’s rates indicate a year-on-year commodity price increase of 5 to 30 per cent.
The high food inflation rates saw the agricultural and export price indices close the period under review at four and two per cent higher respectively, compared to two weeks ago.
Cereal price indices closed four per cent higher.
"Prices of wheat, rice and maize all saw an increase and closed seven, two and three per cent higher, respectively, compared to two weeks ago,” the lender says.
However, on a year-on-year basis, maize and wheat prices are now 20 per cent and three per cent lower, respectively, while rice prices are 10 per cent higher.
Compared to January 2021, maize and rice prices are now 19 per cent and two per cent higher, respectively, while wheat prices are three per cent lower.
The global lender largely attributes the high costs of food products to the strong US dollar, which has kept commodity prices high in local currencies.
The Kenyan shilling for instance, has weakened against the greenback by about 19 per cent year-to-date, closing trade at 140.2 yesterday.
Year-on-year, since early 2020 when it started shedding its value, the shilling has weakened by about 41 per cent, further pushing up the cost of imports, as the country remains a net importer.
In addition, the lender says post-farm gate costs such as energy, transportation and food manufacturing costs, which account for a large share of the retail price; remain high because of core inflationary pressures.
