Why your chapati will be more expensive this Christmas
The international price of wheat, which has been on a steady rise since August, is pushing up the local cost of flour, signalling a costlier commodity during the festive season.
The price of a tonne of the cereal has gone up from Sh22,440 in August to Sh27,540, fuelled by a shortage of supplies from Russia, which is restricting exports to protect its citizens against higher prices.
Consumer prices of wheat flour have shot up to a high of Sh122 for a two-kilogramme packet, from a low of Sh112 in August. Russia is one of the leading exporters of wheat internationally and also to Kenya.
“Wheat prices have been going up since August and this has seen a 15 percent rise in the cost of wheat landing in the country,” says Mr Rajan Shah, the chief executive of Capwell Industries.
The cost of clearing the produce, which includes transport from Mombasa Port to Nairobi, has pushed the price of wheat to Sh3,200 for a 90-kilogramme bag from a low of Sh2,600.
There has, however, been only a marginal jump in consumer prices due to stiff competition resulting from new players in the market.
“It is a cut-throat competition right now in the market and millers are very keen on how they handle prices as they fight to win customers,” he said.
Capwell Industries opened a Sh1 billion wheat flour plant in September, as it embarked on an expansion drive.
This comes at a time when Unga Group is testing its second line of a newly installed wheat plant in Eldoret, as it seeks to improve efficiency in milling to meet growing demand and cut the production cost.
Wheat production is expected to improve this year following good weather that boosted production across the crop growing region.
The Cereal Growers Association (CGA) chief executive officer, Mr Anthony Kioko, says the production is expected to expand from 2.7 million bags last year to three million bags.
Kenya is a net importer of wheat, bringing in two-thirds of its requirement to meet the annual consumption of 900,000 tonnes against the annual local production of some 350,000 tonnes.