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Households should expect an increase in food prices in the next one month, a Central Bank of Kenya survey shows.

This,  even as the government banks on favourable weather conditions, fertiliser subsidies and a good harvest to ease commodity prices and stabilise inflation.

According to the Report on Agriculture Price Survey, most of the respondents (69.6 percent) expect the prices to increase in the next one month compared to 61.1 percent and 55.6 percent in June and May, respectively.

This is largely due to the implementation of the Finance Act 2023 with more people (72.4 per cent) expecting the prices to increase further in the next three months.

This comes as retail and wholesale prices continue to be impacted by transport costs, input costs and weather conditions, with transport having the biggest impact, following the implementation of the VAT on fuel. Middlemen play a less significant role, according to the survey.

Distance to markets, supply chain disruptions and labour costs also have a significant impact on price setting.

With this, prices of eggs, onions, sugar and cooking oil are expected to remain high with possible increment on the back of supply constraints.

“Egg prices are expected to rise with reduced supply during the cold season. The prices of cooking oil, fat and sugar remain elevated and could rise further owing to the high importation cost and reduced cane deliveries, respectively,” CBK said in the survey.

An egg currently costs Sh15 with a 30-egg crate ranges from Sh460 to Sh500 in most retail outlets and markets in Nairobi.

Sugar prices have also been on the rise with a 2-kg pack averaging between Sh420 and Sh450.

Prices of rice and wheat products remain sticky due to reduced production and high cost of imports.

Some farmers have cited rust infection in wheat as the reason behind the reduced output and high prices, with costly imports mainly from Russia and Ukraine impacting on retail prices.

Retail prices of cereals, grains and their end products are however expected to either decline or remain unchanged.

There is also an expected decline in the price of animal products, mainly milk, on account of more pasture becoming available following the long rains season.

This month, the price of vegetable items reduced, though at a decreasing rate, following increased supply of the fast-maturing crops from the long rains season.

The survey drew respondents from wholesale, and retail markets, and farms in major towns across the country.

These included Nairobi, Nairobi Metropolitan area, Naivasha, Gilgil, Nakuru, Narok, Bomet, Nyandarua, Nyahururu, Kisumu, Mombasa, Kisii, Eldoret, Kitale, Meru, Mwea, Machakos and Isebania.

Others are Nyeri, Molo, Kericho, Isiolo, Oloitoktok, Namanga and Makueni.

An increase could push up the cost of living in Kenya where inflation eased to below the government's preferred target band of between 2.5 per cent and 7.5 per cent for the first time in more than a year.

It was recorded at 7.3 per cent in July after dropping from 7.9 per cent in June.

According to the Kenya National Bureau of Statistics, the inflation was largely due to increase in prices of commodities under transport (13.0%), food and non-alcoholic beverages (8.6%) and housing, water, electricity, gas and other fuels (7.8%), between July 2022 and July 2023.

The projections now mean consumers could be forced to dig deeper into their pockets to afford food commodities.

Meanwhile, CBK notes that the use of farm inputs that embody modern technology such as improved seeds, inorganic fertilisers, agrochemicals, farm implements, and irrigation has potential to increase the level of output and reduce food insecurity for the masses, whose mainstay is agriculture.

While most farmers employ a combination of inputs to improve output, use of inorganic fertiliser is more widespread followed by the use of organic fertiliser or manure.

The survey established that 49 per cent of the sampled farmers had received the government subsidised fertiliser by early July 2023, compared to 43 per cent and 29 per cent who received in May and March 2023, respectively.

Nevertheless, some farmers raised concerns on the Ministry of Agriculture using the North Rift season as the benchmark for issuing the subsidised planting and top-dressing fertiliser.

They argue that the regions are not homogenous and there could be timing differences in planting and harvesting.

Most farmers also  cited high cost of inputs such as seeds and fertiliser, lack of finances, high cost of mechanisation, poor quality of inputs due to counterfeits; and limited knowledge of inputs as the main constraining factors.