India’s directive on exports of sugar and rice is likely to elevate Kenya’s inflation, which had started easing on the back of lower prices of food.
India has banned the export of rice and sugar at a time when Kenya is relying on cheap imports from this Asian State to ease the cost of living that has seen the price of food commodities rise to unprecedented levels.
Inflation, which measures the cost of living, slowed to 7.3 percent in July from 7.9 percent a month earlier, according to the Kenya National Bureau of Statistics.
The drop in inflation was occasioned by a decline in the price of food commodities, which is the biggest driver of the cost of living.
The United Nations’ Food and Agricultural Organisation said last week that its global Food Price Index rose 1.3 percent in July compared with the month before.
Until the ban on sugar was effected, India was the main source market for Kenyan sugar as it was the only country selling the commodity at a lower price on the global stage.
This has left Kenya to rely on expensive sugar imports from Uganda as the main source currently, pushing up the cost of the sweetener on the shelves with a kilo retailing at Sh250 from Sh150 at the beginning of the year.
Industry data from the sugar regulator shows that a tonne of the commodity from India is landing in Mombasa at Sh66,000 when compared with Ksh117,000 for the same quantity from Uganda.
The Indian government says El Nino weather pattern could reduce rainfall and dent production, hence impacting the available local stock for its people.
The World Meteorological Organisation (WMO) has forecast El Nino weather patterns in the coming months, which India believes will trigger a drought situation later in the year resulting in a high decline in production.
India had already introduced some form of restrictions on sugar in late 2022, limiting exports to six million tonnes. The new plan to limit further exports will see restrictions on shipments of around 85,000 tonnes that are yet to leave Indian shores.
India, the largest exporter of rice in the world, pulled a surprise last month when it announced that it was banning the export of non-basmati rice to tame the runaway price of the grain locally.
The price of rice, which had declined to Ksh80 for ordinary loose rice, has so far climbed to Ksh100 in a major blow to consumers.
Kenya mainly relies on imports to meet the annual rice needs bringing in 75 percent of all the requirements in a given year.