Food prices likely to rise further before rains offer hope of relief, CBK survey warns

Maize crop damaged by drought in Trans Nzoia county/ FILEKENYAN households should brace for further increases in food prices in the coming weeks as high fuel prices, rising production costs and prolonged dry weather threaten supplies.

This, even as farmers anticipate improved harvests from the October–December rains.

The Central Bank of Kenya’s September 2026 Agriculture Sector Survey points to mounting short-term inflationary pressures, with milk, maize flour, wheat products, sugar and vegetables among commodities facing potential price increases.

The CBK survey, conducted between September 21 and 25 among 466 farmers, retailers and wholesalers, found that 64 per cent of respondents expected the total inflation rate to rise over the next month.

However, 61 per cent anticipated would ease over the next three months, reflecting hopes that improved rainfall and food supplies will moderate prices.

“The survey points to an increase in near-term inflation expectations, mainly reflecting emerging supply-side risks and weather conditions,” the CBK said.

The warning comes as annual inflation climbed to 6.8 per cent in September, from 6.6 per cent in August and 6.5 per cent in July, driven largely by higher transport, food and non-food costs.

Milk emerged as a major pressure point, with 74 per cent of respondents expecting fresh packaged cow milk prices to rise in the coming month.

For fresh unpackaged milk, expectations of higher prices rose to 67 per cent from 11 per cent over the same period.

The CBK attributed the pressure partly to the depressed March–May long-rains season, which affected pasture in some producing regions, reducing milk supplies and pushing up prices.

Prices of staple foods are also expected to increase. The proportion of respondents anticipating higher prices for sifted maize flour rose to 40 per cent in September from 19 per cent in August, while expectations for white wheat flour increased to 48 per cent from 29 per cent.

For sugar, 28 per cent of respondents expected prices to rise, compared with 15 per cent in August.

Transport and production costs are compounding the pressure. The survey found that 97 per cent of respondents identified weather conditions as affecting retail prices, while 92 per cent cited transport costs and 80 per cent pointed to farm input prices.

Fuel prices have added to the burden, with the Energy and Petroleum Regulatory Authority setting Nairobi’s maximum retail prices at Sh226.96 per litre for super petrol, Sh227.76 for diesel and Sh219.87 for kerosene, effective through November 14.

Higher fuel costs threaten to raise the cost of transporting food, operating farm machinery and manufacturing essential goods, potentially prolonging pressure on household budgets.

The US-Israel-Iran conflict is a significant influence on retail prices.

Despite the near-term risks, farmers are increasingly optimistic about the agricultural outlook. The proportion expecting improved sector performance over the next year rose to 76 per cent in September from 67 per cent in July.

Respondents also reported plans to increase acreage under wheat, potatoes, millet, rice, maize and beans, anticipating better rainfall and production prospects.

However, the CBK cautioned that increased planting may not automatically translate into bigger harvests, as excessive rainfall and flooding could destroy crops and damage infrastructure.

Rice farmers were particularly optimistic, with a 55 per cent balance of opinion anticipating increased output. Expectations for tomatoes remained positive, although the balance declined to 38 per cent from 54 per cent in July.

The findings highlight the vulnerability of food production to weather shocks, with 76 per cent of sampled farmers relying mainly on rain-fed agriculture and only 24 per cent reporting irrigation as their primary water source.

The CBK recommended sustained government support to lower the cost of certified seeds, fertiliser, pesticides and farm machinery, alongside improved agricultural extension services, roads and irrigation infrastructure.

Subsidised fertiliser remains a critical intervention, with 79 per cent of sampled farmers reporting that they had benefited from the programme and more than 80 per cent identifying it as important for boosting production.

President Willia Ruto has since announced a further reduction in farm input prices, lowering a 50kg bag of subsidized fertilizer from Sh2,500 to Sh2,000 and cutting a 2kg packet of maize seeds to Sh150 from Sh300, starting next month.

Access to credit is also becoming increasingly important with CBK holding interest rates at 8.75 per cent during its Monetary Policy Committee meeting, on October 7.

The proportion of farmers borrowing to finance agricultural activities rose to 45 per cent in September from 34 per cent in July.

Of those accessing loans, 91 per cent used the funds to buy farm inputs, while 60 per cent financed labour costs.