Wheat prices in Kenya to remain high ahead of festive season

Published Oct 27, 2022

Tridge summary

The article highlights the ongoing effect of the Russia-Ukraine conflict on wheat prices in Kenya, explaining the reason for the sustained high prices of wheat products into next year. Despite falling international wheat prices, local bakers face challenges due to prior high fixed costs and futures orders made at increased prices earlier in the year. The war's impact on wheat supply, primarily from Ukraine, together with rising fuel costs, has led to a significant increase in the price of wheat flour and bread in Kenya. The introduction of wheat shipments from Ukraine marks a positive development for Kenya's wheat supply, diversifying sources beyond traditional suppliers like Canada, Australia, and Latvia.

Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

Consumers will continue paying more on wheat products for the remainder of the year as bakers say the cost will not drop this October as earlier projected, signalling a costly Christmas. Even though the cost of wheat at the international market has dropped to a low of $390 a tonne, processors say the supplies that they are getting at the market were purchased in April at higher rates of $540 a tonne. The bakers say the contracts that were entered in April, for the crop that was delivered in August were based on the prevailing higher prices at the height of the Russian-Ukrainian war that impacted negatively on prices. “Prices will not come down now because the wheat that we are getting currently is what we bought at an exorbitant cost in April and this is what will reflect on the cost of flour at least up to January next year,” said Bimal Shah, managing director at Broadways Group of Companies. Processors normally do futures orders to be certain of the availability of the commodity ...

Source: Businessdailyafrica