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Rising farming cost increases Kenya’s inflation to 9.6% 

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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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