CBK Unveils Reasons Behind Soaring Onion, Tomato, and Sugar Prices
The Central Bank of Kenya (CBK) has disclosed the reasons behind the recent hike in the prices of sugar, onions, and tomatoes.
In its latest report released on December 6, 2023, the monetary policy regulator pointed out that onion prices rose by 53.8 percent in November 2023.
During the period under review, tomato, and sugar prices rose by 40.4% and 39.0% respectively.
According to CBK, the hike in onion prices was due to an increase in demand for imported products from the neighboring country, Tanzania, as Kenyans prefer them for their longer shelf life and overall quality.
Per CBK’s report, another reason why tomato prices rose was due to increased rainfall experienced in different parts of the country and cold weather conditions that have made it difficult for the vegetable to grow.
Even though the government has put in measures to improve the supply of sugar through imports meant to moderate prices, stabilization has not yet been achieved.
CBK further clarified that the recent hike in prices of tomatoes and onions is expected to remain elevated in the coming months due to spoilage from the higher rainfall that may lead to an increase in, transport, and import costs.
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On the other hand, efforts to revive local sugar companies have not been fully maximized even though most sugar companies are expected to be up and running before the end of the year which might see stabilization of prices in the future.
“Domestic sugar factories started to re-open in October 2023 after shutdown for maintenance and are expected to fully re-open in December 2023,” clarified the CBK Monetary Policy Committee.
Furthermore, the government is also seeking to improve the sugar supply through importing from global sugar suppliers such as Brazil and China to moderate the current prices. These countries have since recorded stable prices from bumper harvests and sluggish demands within their shores.
Meanwhile, the report also revealed that Kenyans are set to pay more for their loans after the authority raised the base lending rate by 2pc to 12.5pc from 10.5pc.
The ripple effect will be top banks in the country pricing their loans at higher rates.
CBK Unveils Reasons Behind Soaring Onion, Tomato, and Sugar Prices