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Fresh milk prices fall by Sh10 on duty-free powder imports, more supplies

Milk at a supermarket in Kisumu on May 9, 2017. Dairy processors have reduced the price of milk by Sh10 per half-litre packet. FILE PHOTO | NMG

Dairy processors have reduced the price of milk by Sh10 per half-litre packet.

The drop in cost follows a slight increase in farm supplies and the importation of duty-free milk powder.

Brookside Dairy and New Kenya Co-operative Creameries announced the fresh milk consumer prices cuts starting Tuesday.

“The forces driving market correction have commenced, with a major change being the improved supplies from farmers. We will continue to observe the motions in the market and react accordingly.

Eventually, the markets are expected to reach an equilibrium level,” said John Gethi, Brookside Dairies director of milk procurement.

Market correction

According to Mr Gethi, the reduced prices were as a result of the market undergoing a correction on the back of improved raw milk intakes.

“The decision has further been informed by the move of the National Government intervention, through a gazette notice, allowing importation of duty-free milk powder to help bridge the raw milk shortage,” said KCC in a statement.

Milk prices had shot to an all-time high of Sh65 per half-litre packet following prolonged drought that ran from December 2016 to May 2017, the longest dry spell so far experienced in the recent past.

A fortnight ago, Treasury Secretary Henry Rotich removed duty on powdered milk to allow importation of 9,000 tonnes of product to ease the shortage.



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