Traders in Kenya feel the pinch as commodity prices rise

Kenyan traders are feeling the pinch of rising commodity prices as consumers keep off a number of basic goods, which are slowly becoming a luxury.

From food to clothes to fuel, prices of most basic items have hit an all-time high pushing thousands of families to the edge.

The cost of maize flour, for instance, stands at a record high of 1.5 U.S. dollars for a 2kg pack, the highest ever in the history of the produce in the country.

On the other hand, a 500ml packet of milk is currently going for 0.6 dollars, a 6 percent rise from a similar period last year.

The price of kerosene has risen by 21 percent to 0.68 dollars a litre, coriander 60 percent to 1.1 dollars for a kilo, sugar 17 percent, potatoes 30 percent, dry maize 30 percent and spinach 30 percent, among others.

The cost of housing has also not spared squeezed families as those living in single rooms are currently paying an average of 40 dollars, a 3 percent rise from last year, while those in three-bedroom houses are paying 350 dollars, a rise of 4 percent, according to the Kenya National Bureau of Statistics.

The surge in commodity prices has pushed the East African nation's biggest economy inflation to 10.3 percent, a five-year high, as consumers' purchasing power gets eroded.

Traders are thus feeling the pinch as consumers adopt survival tactics in the process of keeping off most commodities. Among the worst affected commodity is milk, whose high cost has made it a luxury among many Kenyan farmers.

"I stopped buying milk from my supply in crates because people are not buying. When prices were about 0.50 dollars, I would sell at least 15 packets a day but right now selling even five seems a miracle," Agnes Oyoo, a shopkeeper in Komarock on the east of Nairobi said Wednesday.

Her shop is located in a middle-class estate where a good number of people are home-owners. That they are not buying shows how consumers are suffering.

"Nearly everything is not moving, from milk to airtime to soap and cooking fat. Business is at a standstill that I am afraid of bringing in new stock," she said.

Feeling an equal pinch are grocery sellers who have recorded massive decline in sales of vegetables, tomatoes and onions.

At his shop in Nairobi, Moses Mutuku is selling a big tomato at 0.10 dollars, the price having doubled in two months.

On the other hand, three tiny tomatoes, which have become consumer favourites, are going for the same price. In December last year, the trader would sell such six tomatoes at 0.10 dollars.

"Right now I mainly buy the small tomatoes because that is what is selling a little faster. Life is becoming harder for us because I barely make good money to run my business and sustain my family," says Mutuku, noting his sales have plummeted to 5 dollars a day from more than double the amount.

Analysts noted that the current inflation is due to several things: first is lack of rains which affected food production, rising oil prices and elections.

"Poor weather has really been a major problem, affecting food production and thus grocery and grain prices because the country now has to rely on imports. This is something that we cannot control thus consumers and traders must prepare for worse times as the weather man has said the rains would still not be adequate," said Henry Wandera, an economics lecturer in Nairobi.

He noted that a surge in prices of goods normally reduces consumer spending power, making many shun several goods as they struggle to survive.

"This is what is happening currently. While the government has taken measures that include removing tax on things like maize, these many not help much especially if rains fail and oil prices continue to surge." he said. Endit