Keny. Fighting Hunger Worldwide. HIGHLIGHTS The onset of the long much. particularly in the. whichh is likely to. replant. 2013, prices.
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1 BULLETIN May 2014 ISSUE 2 Fighting Hunger Worldwide Keny ya Market Watch The Kenya market watch report is produced by the VAM unit of the World Food Programme Kenya on a monthly basis. Wholesale price data for maize (which is Kenya s staple) and beans from the State Departmentt of Agriculture (SDA) for Eldoret, Kitale, Nairobi, Kisumu, Mombasa, Nakuru, Kitui, Malindi and Taveta are analysed. The Nairobi, Mombasa and Nakuru markets are indicative for urban consumers. Kisumu is a large urban market located in a deficit areaa with marginal agricultural productivity. Eldoret and Kitale markets are in high potential areas and located in the western Kenya grain basket zone. Kitui, Malindi and Taveta markets are located in south-eastern and coastal marginal agricultural zones which are also deficit areas. Taveta is a crucial cross-border trade point (Kenya-Tanz zania). There are large regional differentials in prices of all commodities across Kenya, with the highest prices experienced in the marginal arid and semi-arid lands of Kenya. The update is divided into three sections: price trends analysis, production and import situation, and other issues including: Inflation, fuel pump prices and policy news. HIGHLIGHTS The onset of the long rains in March was normally timed in much of the country during the second to third weeks of March. Theree were significant rainfall deficits in the month of April particularly in the Western part of the country. However, thus far, the spatial distribution and temporal distribution has been erratic, whichh is likely to negatively impact crop and livestock production. Crop growth so far has progressed poorly in most parts of the key- farmers will have to producing Rift Valley, Nyanza, and Western highlands, and some replant. General inflation has continued to decline since September 2013, easing inflationary pressure on householdss including the poor. However, inflation remained higher in April 2014 than it was in Despite the declining inflation rates, wholesale maize prices in Kitale, Kitui and Mombasa increased from March to April. The Kenya food security technical working group April to September food security outlook report see here, states that the increase in maize prices is due to high demand in markets driven by the increasing consumption, as well as the gradual decline in stocks at national and household levels; which occurred somewhat earlier than usual due to the below average long and short rains harvest in 2013/2014. The average wholesalee price of beans increased in all three main markets of Eldoret, Kisumu and Nairobi, due to low supply, also attributed to the below average long and short rains harvest in 2013/ Diesel, and Kerosene prices marginally fell - as compared to March 2014; as gasoline (super petrol) prices went up marginally within the period under review. Grain highlights from the country According to the State Department of Agriculture May 2014 food security brief, the national maize stock as at end of April was 10.7 million bags out of which 5.8 million is being held by farmers, 1.5 million bags by traders and 3 million by NCPB as Strategic Grain Reserve (SGR). Millers are holding another 408,000 bags. The country will begin experiencing deficits in July and cross border inflows will be expected to ease the deficits before harvesting starts. 2
2 1. 0 PRICE TREND ANALYSIS S 1.11 Maize price changes and trend During the period under review, the average wholesale price of maize - in the threee main markets - remained constant in Kisumu, and decreased in Eldoret and Nairobi, see figure 2 and 4. In other key markets, prices remained constant in Malindi and Taveta, as they increased in Kitale, Kitui, and Mombasa, see figure 3. According to the Kenya Food Security Technical Working Group April to September food security outlook report; the increase in maize prices is due to highh demand in markets driven by the increasing consumption, as well as the gradual decline in stocks at national and household levels; which occurred somewhat earlier than usual due to the below average long and short rains harvest in 2013/2014. The report further states that; maize prices will moderately increase till end of May and that a combinationn of imports between June and July and the early harvest from the high- and medium-potential areas in August will help keep maize prices mostly stable between May and September. 1.2 Beans wholesale price change and trend The average wholesale price of beans increased in Eldoret, Kisumu and Nairobi, see figure 5 and 6. The price increase is also attributed to the high demand in markets as earlier explained - driven by the increasing consumption as stocks at national and household levels gradually decline, somewhat earlier than usual due to the below average long and short rains harvest in 2013/
3 2. 0 PRODUCTION AND IMPORT SITUATION 2.1 Production The State Department of Agriculture (SDA) May 2014 food security brief states that; by end of April 2014, over 95% of the target land preparation had been achieved. According to the Kenya meteorologic cal department weather forecast for May 2014; normal crop production is expected to resume in most counties, especially those in the high potential areas. However, there will be delayed crop due to late or re-planted crop, especially in Nyanza, North Rift and parts of Central Rift. About 30% of long rains crop in these regions may suffer low production due to late planting. In most parts of South Rift, Central and Eastern regions, the long rains crops are doing well and normal harvesting is projected Imports The Maize balance sheet projected to 31st July, 2014 shows that from the current levels of stocks, the country is likely to experience a deficit of 720,000 bags. The shortfall should be met throughh cross border trade within the East African countries; which is expected to pick towards the end of May. 2.3 Maize Lethal Necrosis Disease (MLND) The state department of agriculture cited a rapid survey done by Plant Protection Services Division and KEPHIS in South Rift towards the end of March, which reported a serious prevalence of the MLND in the region. This was particularly noted in Transmara West, Borabu and Bomet sub counties. 2.4 Fertilizer and seeds subsidies The SDA report further noted that; the National government and NCPB have so far procured 160,750 MT of assorted fertilizer (DAP, CAN, Urea, SA and NPK). So far, 97,522 MT has been distributed through NCPB deports. The balance of 63,228 MT is in Mombasa awaiting distribution and is mainly for top-dressing. In addition, NCPB has so far distributedd 62,000 Kg of assorted subsidized seeds, mainly legumes and pulses seeds, out of the 133,000 Kg procured for 2014 long rains OTHER ISSUES 3.1 Inflation (April 2014) According to the Kenya National Bureau of Statistics (KNBS) April report, the month on month consumer price index (CPI) increased by 1.09 per cent from in March to in April The overall inflation rate stood at 6.41 per cent in April, this was an increase from 6.27 and 4.12 percent recordedd in March 2014 and April 2013 respectively. See table 2. During the review period, the month on 1 Source: The Ministry of Agriculture, Livestock development and fisheries State Department of Agriculture May 2014 food security brief 4
4 month food and non-alcoholic drinks Index increased by 1.66 per cent as compared to March 2014; this was as a result of aggregate rises in prices of several food items outweighing notable falls in prices of others2. Compared to April 2013, the index increased by 8.09 per cent. 3.2 Fuel pump prices (April 2014) The average diesel and kerosene prices fell by 0.6 and 0.9 percent respectively. Gasoline (super petrol) prices went up by 0.4 percent see table 3 below. 3.3 Policy News Kenya adds milk to food reserve, and plans to raise its grain stock Kenya plans to broaden its Strategic Grain Reserve (SGR) to include non-cereal foods, in a move aimed at improving the country s food security (availability) status. The Ministry of Agriculture estimates that it requires at least Ksh5 billion ($58.8 million) to transform the existing SGR which stores only maize - into a Strategic Food Reserve (SFR) for various foods. Milk is one of the non-cereal foods to be included in the country s strategic food reserve strategy to help protect dairy farmers from price volatility and ensure constant supply of the commodity throughout the year. In the meantime, the government plans to expand grain reserves to include beans, sorghum, millet and others Underfunding agriculture by some counties reported in a research by Tegemeo institute According to the new Kenyan constitution, the devolved units (counties) are now responsible for crop and animal husbandry, livestock sale yards, county abattoirs, plant and animal disease control and fisheries. The national Government is mandated with policy formulation and co-ordination. An analysis by Tegemeo Institute of Egerton University Kenya - on the first year county government budgets (2013/14) focused on the agricultural sector funding. The report shows that while some counties allocated reasonable funding - up to 24% of the total budget - to the agricultural sector in year 2013/14, others did not allocate any funding to the sector, despite its importance in food security and employment creation. Most at risk of underfunding are on-going programmes started by the ministries before the transition to the devolved governments. This exposes them to higher costs, delayed returns, and risk of being abandoned in the short run. The implication is that underfunding of the sector is likely to have negative impacts on the growth momentum the sector has experienced. The Institute recommends increasing allocation under the revised budgets and prioritisation of the agricultural sector in the county government medium term plans4. 2 For instance, the retail price of one kilogram of tomatoes, sukuma wiki (kales), fresh fish, onions, sifted maize flour (2 kg) and potatoes (Irish) increased by 18.53, 3.63, 2.07, 2.56, 0.18 and 5.29 respectively; the price of a kilogram of sugar and fresh packet milk (500 g) reduced by 1.83 and 2.53 per cent respectively. 3 Source: /2560/ /-/103we9a/-/index.html 4 Source:
5 Table 1: Nominal wholesale prices of maize and beans in the main and other key markets Market Price (KES per 90 Kg bag) Current % Change % Change % Change Prices Trend Mar. 14 Apr. 14 Price on last on same on 5 Year Change over (USD/MT) month month of LTA 1 month 1 year 5 Years last year. MAIZE Eldoret 3, , % 15% 22% Kisumu 3, , % 0% 20% Nairobi 3, , % 0% 13% Kitale 2, , % 7% Kitui 3, , % 19% Malindi 3, , % 7% Mombasa 2, , % 5% Taveta 3, , % 0% BEANS Eldoret 8, , % 0% 51% Kisumu 7, , % 11% 33% Nairobi 3, , % 13% 25% Source: State Department of Agriculture. 1 USD to KES (Apr UN Dollar rate) Table 2: Consumer Price Index (CPI) CPI/Inflation Previous Month (Mar. Current Month (Apr. Percentage Change from Trend: Change over 2014) 2014) previous month one Month Consumer Price Index Overall Inflation Source: Kenya National Bureau of Statistics (KNBS) April Table 3: National Average fuel prices for the April 2014 Commodity Previous month price March 2014 KES/Litre Current month price April 2014 KES/Litre Percentage change from Previous Period. Trend: Change over one Month Diesel Gasoline (Super Petrol) Kerosene Source: The Energy Regulatory Commission (ERC) Kenya. KEY: Change Price trend Sign < 0% Decreasing >= 0% and < 5% Stable >= 5% and < 10% Slightly stable >=10% Increasing Source: The WFP Market Monitor Report Issue 23 April 2014 For extra information please contact: Julius Kisingu, WFP Kenya: Julius.Kisingu@wfp.org Diego Fernandez, WFP Kenya: Diego.Fernandez@wfp.org
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