Kenyans to spend more on a cup of tea as milk prices set to rise

Kenyans are set to spend more on a cup of tea starting from the first quarter of 2018.

Kenya Dairy Board (KDB) has warned that milk prices will rise from January following poor production this year occasioned by drought and depletion of powder milk.

KDB managing director Margaret Kibogy says the board will be meeting next month to review the situation and come up with intervention measures to avoid last-minute decisions.

“If there is a severe drought in January, Kenya will be in a crisis given that currently we do not have stocks of powdered milk that normally come in handy in times of shortages,” said Ms Kibogy.

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Processors have no stocks of powdered milk after they exhausted inventories during the shortage that hit the country between January and May this year.

A litre of milk currently retails at Sh120 ($1.2) and the price could therefore rise to as much as Sh150 ($1.5) if the situation remains the same.

Kenya Meteorological department two months ago warned that the October-December short rains will cease at a critical stage in Kenya’s bread basket counties of North Rift counties making a dire situation even worse.

Kenya’s electioneering period has not helped matters either with many farmers embracing a wait and see approach and cutting down on their annual prodcutions.

Processors are currently not converting milk to powder as there are no excess supplies from farms.

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The dairy sector only realised a production increase of 15 per cent after the rains started last April.

Milk production dropped by 17.5 per cent in the first five months of 2017 forcing the government to allow 9,000 tonnes tax-exempt milk powder imports to stabilise prices.

However, so far only half of the milk powder imports has arrived in the country forcing the government to extend the window that was set to expire last month to December 31.