Milk on supermarket shelf.[Photo/Nation]
The New Kenya Co-operative Creameries (New KCC) has once again cut the price of milk for a second time in less than two months yet retailers still hold onto the old prices.
The State-owned firm has cut the factory price of milk for a dozen 500ml fino packets from Sh564 to Sh540 and ESL from Sh528 to Sh504. The TCA 200ml package has dropped from Sh493 to Sh451 with the 100ml Kabambe coming to Sh504 from Sh528.
Despite the cut, these prices have not reflected on the shop shelves and the milk is selling at the initial price set in June after the first review, with half a litre at Sh50.
“The lower price is definitely in reaction to the increase in volumes that has been witnessed in the last couple of months,” said Kenya Dairy Board managing director Margret Kibogy.
She said the increase in volumes is still lower than that of 2016.
“There has been growth in volumes of milk collected in the informal sector. However, the increase is still lower compared with what was recorded in 2016,” she said.
The new KCC managing director Nixon Sigey stated that the end of last year the firm had registered a rise in supplies from farmers countrywide.
“Demand and supply factor is the main reason why the cost of milk has been coming down in the recent days. We are getting enough milk from farmers at the moment,” he said.
The lower consumer prices have come as bad news to farmers with the processors buying the produce at Sh35 down from Sh38.
The dairy board last year foresaw another round of high milk prices starting this month due to a minimal growth in volumes. Milk production often dips at the beginning of the year when drought kicks in affecting many farmers who rely on open grazing.
The Treasury waived duty on imported powdered milk in May last year to allow processors to ship in 9,000 tonnes of powder milk to boost supply.