Kenya’s rains may ease milk prices up 6% – EBC Financial Group
Milk is among the ten biggest single items in the KNBS inflation basket: packeted fresh milk ranks seventh and loose milk ninth.
KENYA – According to EBC Financial Group (EBC), Kenya’s rains may end the milk shortage within months, but they are unlikely to lower the price of bread or cooking oil.
Agriculture Cabinet Secretary Mutahi Kagwe links the milk shortage to the dry season, while the Central Bank of Kenya (CBK) says wheat and palm oil prices rose on world markets.
This gap shows up in core inflation, a Kenya National Bureau of Statistics (KNBS) measure that leaves out the most unstable prices and guides central bank interest rate decisions.
Core inflation rose to 4.0% in September from 3.4% in August, mainly on milk, wheat products, and edible oils, according to the CBK Monetary Policy Committee (MPC) statement of 7 October 2026.
The Kenya Dairy Board (KDB) reports consumption at 110 litres per person per year, the highest in sub-Saharan Africa.
The government figures show dairy accounts for 4.5% of GDP and supports about 1.8 million smallholder households, so milk price swings reach shoppers and farmers.
The Kenya Meteorological Service Authority (KMSA) outlook says most of Kenya had below-average rain from June to August, and a Nandi County dairy cooperative says daily deliveries fell from about 10,000 litres to under 2,000.
Nationally, the KDB says milk delivered to processors fell from 84.4 million litres in June to 75 million in August. Prices followed: fresh packeted milk rose 6.0% in September, according to the KNBS September Consumer Price Index.
Rain can help milk, but not immediately
Grass costs less than feed. KDB figures put the cost of a litre at KES 24.50 on open grazing and KES 39.50 with indoor feeding, and Kagwe expects a surplus within months as the October to December rains improve pasture.
Relief will not be instant: farmers and traders in the North Rift say feed prices rose by about a third, and Kagwe says some farmers sell to brokers instead of processors.
About EBC Financial Group
EBC Financial Group, headquartered in London, UK, is a comprehensive financial services group licensed and operating in multiple key jurisdictions worldwide.
The group offers over 200 Contracts for Difference (CFDs) products, including foreign exchange, precious metals, energy, stock indices, US stocks, ETFs, and digital currency.
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