(NAIROBI, KENYA) – Kenyan households should prepare for further increases in food prices in the coming weeks as high fuel costs, rising production expenses and prolonged dry weather threaten supplies, even as farmers anticipate better harvests from the October to December rains.
The Central Bank of Kenya’s September 2026 Agriculture Sector Survey points to growing short-term inflationary pressure, with milk, maize flour, wheat products, sugar and vegetables among the commodities facing possible price increases.
The survey, conducted between 21st and 25th September among 466 farmers, retailers and wholesalers, found that 64% of respondents expected the overall inflation rate to rise over the next month.
However, 61% expected inflation to ease over the next three months, reflecting hopes that improved rainfall and food supplies will moderate prices.
“The survey points to an increase in near-term inflation expectations, mainly reflecting emerging supply-side risks and weather conditions,” the CBK said.
The warning comes as annual inflation climbed to 6.8% in September, from 6.6% in August and 6.5% in July, driven largely by higher transport, food and non-food costs.
Milk emerged as a major pressure point, with 74% of respondents expecting fresh packaged cow milk prices to rise in the coming month.
For fresh unpackaged milk, expectations of higher prices rose to 67% from 11% over the same period.
The CBK attributed the pressure partly to the poor March to May long rains season, which affected pasture in some producing regions, reducing milk supplies and pushing up prices.
Prices of staple foods are also expected to rise. The share of respondents anticipating higher prices for sifted maize flour rose to 40% in September from 19% in August, while expectations for white wheat flour increased to 48% from 29%.
For sugar, 28% of respondents expected prices to rise, compared with 15% in August.
Transport and production costs are adding to the pressure. The survey found that 97% of respondents identified weather conditions as affecting retail prices, while 92% cited transport costs and 80% pointed to farm input prices.
Fuel prices have added to the burden, with the Energy and Petroleum Regulatory Authority setting Nairobi’s maximum retail prices at KES 226.96 ($1.76) per litre for super petrol, KES 227.76 ($1.76) for diesel and KES 219.87 ($1.70) for kerosene, effective through 14th November.
Higher fuel costs threaten to raise the cost of transporting food, operating farm machinery and manufacturing essential goods, potentially prolonging pressure on household budgets.
The US-Israel-Iran conflict is a significant influence on retail prices.
Despite the near-term risks, farmers are increasingly optimistic about the agricultural outlook. The share expecting improved sector performance over the next year rose to 76% in September from 67% in July.
Respondents also reported plans to increase acreage under wheat, potatoes, millet, rice, maize and beans, anticipating better rainfall and production prospects.
However, the CBK cautioned that increased planting may not automatically translate into bigger harvests, as excessive rainfall and flooding could destroy crops and damage infrastructure.
Rice farmers were particularly optimistic, with a 55% balance of opinion anticipating increased output. Expectations for tomatoes remained positive, although the balance declined to 38% from 54% in July.
The findings show the vulnerability of food production to weather shocks, with 76% of sampled farmers relying mainly on rain-fed agriculture and only 24% reporting irrigation as their primary water source.
The CBK recommended sustained government support to lower the cost of certified seeds, fertiliser, pesticides and farm machinery, alongside improved agricultural extension services, roads and irrigation infrastructure.
Subsidised fertiliser remains a critical intervention, with 79% of sampled farmers reporting that they had benefited from the programme and more than 80% identifying it as important for boosting production.
President William Ruto has since announced a further reduction in farm input prices, lowering a 50kg bag of subsidised fertiliser from KES 2,500 ($19.42) to KES 2,000 ($15.53) and cutting a 2kg packet of maize seeds to KES 150 ($1.17) from KES 300 ($2.33), starting next month.
Access to credit is also becoming more important, with the CBK holding interest rates at 8.75% during its Monetary Policy Committee meeting on 7th October.
The share of farmers borrowing to finance agricultural activities rose to 45% in September from 34% in July.
Of those accessing loans, 91% used the funds to buy farm inputs, while 60% financed labour costs.