Kenya Predicts Stable Food Supply, June

Kenya expects a stable supply of food in the six months to June on improved output but may still require some imports of maize to boost its stocks, the agriculture ministry said.

Prices of key staples in east Africa’s biggest economy, including wheat, beans and maize could rise further, presenting a mixed picture for inflation outlook, the ministry said in brief obtained by Reuters.

Kenya said it planned to import 1.35 million 90-kg bags of maize from regional and international markets to bolster supplies despite bigger harvests following recent good rains.

The ministry said the national maize stocks as at January 31 stood at 19.04 million bags from 18.7 million the previous month and expected this to be sufficient until June.

Kenya’s inflation rate climbed to nearly 20 per cent last year on the back of rising food and energy prices.

But the inflation eased to a lower-than-expected 16.69 per cent in February, helped by falls in food and transport costs from a month earlier.

The rise in food prices was mainly driven by a prolonged drought.

Meanwhile, low water levels at the hydro power dams that supply most of the country’s electricity pushed up energy bills and led to costly fuel imports to run thermal generators.

The report said national stocks level of maize as at June 30, 2012 is estimated to be a surplus of 5.5 million bags, which could ease pressure on the prices of the main staple food.

Rainfall during Kenya’s long rainy season starting this month is expected to be near-normal but poorly distributed, meteorologists said on Tuesday.