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    2020 08 23 180443cd6acc4b 520a 4ed5 a911 ca2d2c44507d

    By George Munene

    World food commodity prices remained largely steady in November. Declining international prices of cereals, meat, and dairy products offset increasing prices for vegetable oils and sugar according to the Food and Agriculture Organization of the United Nations (FAO) report on Friday.

    The FAO Food Price Index, which tracks monthly changes in the international prices of a basket of commonly-traded food commodities was only 0.3 per cent higher than its level in November 2021 and a fraction below its level in October.

    The FAO Cereal Price Index declined by 1.3 per cent from the previous month, but it was still up 6.3 per cent from its value a year ago. World wheat and maize prices declined in November by 2.8 per cent and 1.7 per cent, respectively, partly influenced by the extension of the Black Sea Grain Initiative. By contrast, international rice prices moved up by 2.3 per cent.

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    The FAO Vegetable Oil Price Index increased by 2.3 per cent in November, ending seven consecutive months of decline. 

    The FAO Dairy Price Index decreased by 1.2 per cent since October, with world quotations for butter, skim, and whole milk powders falling, amid lower import demand, while those for cheese increased, in part due to fewer export availabilities from leading producing countries in Western Europe.

    The FAO Meat Price Index was 0.9 per cent lower in November than the previous month, as international cattle meat prices fell. Increased export supplies from Australia added to already-high supplies from Brazil, notwithstanding China’s continuing strong import demand. By contrast, world prices of all other meat types rebounded, led by higher quotations for mutton.

    Related News:Staple food prices to remain high through 2022

    The FAO Sugar Price Index rose 5.2 per cent, influenced by strong buying amid tight global sugar supplies due to harvest delays in key producing countries and the announcement by India of a lower sugar export quota. Higher ethanol prices in Brazil also exerted upward pressure on world sugar prices.

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    By George Munene

    According to the World Food Programme (WFP) Famine Early Warning System Network (FEWS NET), Kenya’s historic drought, which has now persisted into a fifth consecutive rainy season, is expected to drive a food crisis across the country's northern and eastern arid and semi-arid lands through at least mid-2023. 

    Cumulative rainfall has been less than 55 per cent of the 40-year average since October 1st, leading to severely diminished food and income from livestock production among pastoral households and crop production and agricultural labor among agropastoral and farming households.

    Pastoral households continue to face precipitous declines in milk availability and livestock-related sources of food and income. As of September, the Kenyan government estimates that around 2.4 million livestock has died due to drought-related causes. County-level estimates indicate that cattle have around a nine per cent mortality rate, while sheep and goats have around a six per cent mortality rate. Livestock body conditions are largely in poor to very poor condition, with livestock reproduction increasingly unviable.

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    In marginal agricultural areas, cropping activities have been delayed due to the late onset of the October to December rains. Well-below-average rainfall is limiting land preparation and planting activities, resulting in below-average agricultural labor opportunities for poor and very poor households. Depleted household food stocks are increasing dependence on high-priced staple foods from the markets, with households relying on income from off-farm labor activities like causal labor and petty trade.

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    Based on available food assistance plans, and given humanitarian access and government capacity for safety nets FEWS NET expects Kenya’s food security to remain normal during the outlook period with the likelihood of a scenario in which no food assistance reaches the drought-affected population currently still considered low.

    However, an increase in acute malnutrition and mortality levels – is still extremely concerning with Turkana and Marsabit facing acute malnutrition levels.

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    By George Munene

    Kenya’s inflation increased to 9.6 per cent in October 2022 from 9.2 per cent in September mainly due to a rise in food and fuel prices according to the Central Bank of Kenya’s (CBK) November 2022 Monetary Policy Committee (MPC) statement.

    Food inflation rose to 15.8 per cent in October from 15.5 per cent in September, largely due to prices of maize and milk following reduced supply attributed to depressed rains, and edible oils and wheat products due to the impact of international supply chain disruptions. 

    Respondents from the CBK’s Survey of the Agriculture Sector identified transport costs due to high fuel prices, unpredictable weather conditions, and the cost of inputs such as seeds and fertilizers as major factors constraining agricultural production.

    Fuel inflation increased to 12.6 per cent in October from 11.7 per cent in September, mainly due to the scaling down of the government fuel subsidy, increases in electricity prices due to higher tariffs, and increases in transport costs-- all of which have increased production costs in agriculture. 

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    Despite sustained optimism about business activity and economic growth through 2023 attributed to increased economic activity and growth in sectors such as ICT and the government’s renewed focus on MSMEs, subdued agricultural sector performance due to depressed rainfall was highlighted as a concern.

    However, output for most agricultural products is expected to increase in the next harvest, on account of improved weather conditions and increased planting acreage.

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