Kenyans brace for higher food costs as fuel prices and dry weather hit supplies

Kenyan consumers may have to dig deeper into their pockets for basic food items in the coming weeks, as expensive fuel, rising agricultural costs and unfavourable weather conditions continue to threaten supplies ahead of the expected October–December rains.

A new survey by the Central Bank of Kenya (CBK) shows that prices of milk, maize flour, wheat products, sugar and vegetables could come under further pressure in the short term, even as farmers grow more hopeful that improved rainfall will boost production and ease food costs in the coming months.

The CBK's September 2026 Agriculture Sector Survey found that 64 per cent of the 466 farmers, retailers and wholesalers interviewed expected overall inflation to increase over the following month. In contrast, 61 per cent believed inflation would decline over the next three months, reflecting expectations that improved weather and stronger food supplies could help bring prices under control.

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

The findings come at a time when the annual inflation rate has continued to rise, reaching 6.8 per cent in September from 6.6 per cent in August and 6.5 per cent in July. Higher transport charges, food prices and other non-food expenses were the main drivers of the increase.

Milk is among the commodities facing the greatest risk of further price increases. The survey found that 74 per cent of respondents expected fresh packaged cow milk to become more expensive over the next month.

The outlook for fresh unpackaged milk was also worrying, with the proportion of respondents anticipating higher prices rising to 67 per cent from 11 per cent over the same period.

The CBK linked some of the pressure on milk supplies to the poor March–May long-rains season, which affected pasture in several producing areas. Reduced pasture availability has affected milk production and contributed to higher prices.

Other household staples are also likely to become more expensive. In September, 40 per cent of respondents expected the price of sifted maize flour to increase, more than double the 19 per cent recorded in August.

Expectations of higher prices for white wheat flour rose to 48 per cent from 29 per cent over the same period. For sugar, the share of respondents forecasting an increase climbed to 28 per cent from 15 per cent in August.

The expected price increases are being driven by a combination of weather-related challenges and the rising cost of producing and distributing goods.

According to the survey, 97 per cent of respondents identified weather conditions as a factor influencing retail prices. Transport expenses were cited by 92 per cent, while 80 per cent pointed to the cost of agricultural inputs.

Fuel prices remain a major concern for farmers, manufacturers and traders, given their effect on the cost of moving food from farms to markets and running agricultural machinery.

The Energy and Petroleum Regulatory Authority set Nairobi's maximum retail prices at Sh226.96 per litre for super petrol, Sh227.76 for diesel and Sh219.87 for kerosene, with the rates effective through November 14.

The high cost of fuel could add to the expense of transporting agricultural produce, operating farm equipment and manufacturing essential products. Businesses facing these higher costs may pass part of the burden on to consumers, keeping pressure on household spending.

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

Despite the expected short-term difficulties, the survey points to growing confidence among farmers about the agricultural sector's prospects over the next year.

The proportion of respondents expecting the sector to perform better over the next 12 months rose to 76 per cent in September, up from 67 per cent in July.

Farmers are preparing to expand production, with respondents indicating plans to increase the land under wheat, potatoes, millet, rice, maize and beans. The plans reflect expectations of more favourable rainfall and better growing conditions during the coming season.

However, the CBK warned that planting more crops would not necessarily guarantee larger harvests. Excessive rainfall and flooding could destroy crops and damage infrastructure, disrupting production and limiting the expected gains.

Rice producers were particularly positive about their prospects, with a 55 per cent balance of opinion expecting output to increase.

Expectations for tomato production also remained favourable, although the balance of respondents anticipating higher output dropped to 38 per cent from 54 per cent in July.

The findings highlight the risks facing Kenya's food supply, particularly the country's dependence on rainfall for agricultural production. Of the farmers surveyed, 76 per cent relied mainly on rain-fed farming, while only 24 per cent reported irrigation as their primary source of water.

This reliance exposes farmers to both inadequate rainfall and excessive precipitation, which can disrupt growing seasons, damage crops and affect the amount of food available in markets.

To improve production and help contain food costs, the CBK recommended continued government support to reduce the prices of certified seeds, fertiliser, pesticides and farm machinery.

The bank also called for better agricultural extension services, improved roads and investment in irrigation infrastructure to help farmers raise output and reduce their vulnerability to changing weather conditions.

Although the October–December rains offer the prospect of better harvests and some relief from rising food prices, the survey indicates that consumers may continue to face higher bills in the near term as fuel expenses, production costs and weather-related supply risks weigh on the market.