Kenyan milk prices second highest in Africa

Kenya’s milk prices are the second most expensive in Africa while the country’s mobile phone calling rates are the second lowest, a new survey shows.

Expatistan Cost of Living Index indicates that whole fat milk prices in Nairobi supermarkets stand at an average of Sh103 per litre, second only to those in South Africa’s city of Bhisho at Sh149 ($1.49).

Cairo is placed third with milk prices at Sh101 ($1.01) a litre, followed by Johannesburg (Sh84) while Cape Town is fifth at Sh83.

The high prices of Kenyan packaged milk has pushed most poor homes in urban towns into the hands of raw milk hawkers who charge less, despite being banned over safety concerns.

Retail shops have also set up milk vending machines, popularly known as milk ATMs, to cash in on the price sensitive consumers.

The news may, however, not go down well with a number of farmers who are accusing processors of offering them a raw deal in terms of producer prices.

Farmers have recently protested against the decision by firms to cut milk prices terming the move as exploitative and aimed at knocking them out of the dairy business.

They said a move by private processors to reduce the prices from Sh30 to Sh25 per litre was unreasonable considering increased prices of fodder and general animal husbandry.

According to them, it costs Sh22 to produce a litre of milk apart from other expenses and lowering the prices to Sh25 will render their ventures unprofitable.

Kenya’s processed milk market has, however, continued to be more lucrative with Africa’s richest man, Nigerian Aliko Dangote, set to establish a powdered milk plant in the coastal town of Kilifi.

This is expected to hot up competition with local firms such as Brookside Dairy, the country’s largest milk processor, alongside New KCC and Githunguri Dairy Farmers Cooperative – producer of Fresha milk brand.

Brookside makes milk brands like Tuzo, Ilara and Molo Milk.

The entry of Mr Dangote’s company signals a fight for raw milk from farmers.

Official data shows that the volume of milk sold grew 10.9 per cent to 600 million litres last year, raking in Sh20.7 billion.

The survey shows that Kenya enjoys the second lowest mobile calling rates after Egypt.

It costs an average of Sh4 per minute to make domestic calls in Kenya and Sh3 in Egypt. Making a call in Bhisho, Eastern Cape, South Africa, would set you back Sh16 per minute.

Kenyan consumers have benefited from low rates on past tariff wars among telcos, in the push to widen their customer base.

The report says that Nairobi enjoys the third cheapest bread (250 grammes) at average of Sh56 in supermarkets, with Tunisia having the lowest cost (Sh15), followed by Cairo (Sh41).

The same size of loaf costs Sh78 ($0.78) in Bhisho.