Kenya misses 91% of its dairy export market in second quarter

KENYA – Kenya has registered a 91% decline in dairy products exports in the second quarter of the year to 20,984 kilogrammes compared to 233,132 kilogrammes exported in the first quarter due to COVID-19 disruptions and low production.

According to a status report by the Kenya Dairy Board (KDB), January saw 46,725 kg sold with February recording sales of 81,682 kg and March is said to be the best month with 94,725 kg of dairy products processed and exported to the Middle East and West African markets.

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The good start was disrupted by the COVID-19 pandemic with the country registering the worst decline in May at 5,169 kg while June recorded 5,488 kilogrammes, reports Business Daily.

“Despite a good start, milk deliveries have declined since the onset of the coronavirus pandemic in March, falling by three per cent in the first six months of 2020 compared to the same period last year, where the greatest drop was between April and July 2020 at five per cent,” said KDB managing director Margaret Kibogy.

Milk volumes marketed in the formal market dropped from 63.4 million litres in January to 40.2 million litres in June.

Ms Kibogy has revealed that the industry has a 4.2 million litres daily processing capacity but only 1.34 million litres or only 31 per cent is being utilised thus calling for heightened utilisation.

Under the Cash Cow Initiative, KDB is seeking to open up vast chunks of public land for fodder cultivation by resident dairy co-operative that will also be trained on bulking and silage making, thereby ensuring a round the year availability of feeds for dairy animals.

She said major investments in the purchase of milk coolers had also raised availability of cooling facilities in the country to 3.4 million litres per day, but that farmers were using only 37 per cent capacity (1.26 million litres).

Kenya had 47 licensed processors as at December 2019, having increased from 26 in operation in 2018.

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Milk price changes

The falling supplies have however resulted in an increase in the farm gate price of milk.  State-owned, dairy processor New KCC has increased its price from Sh33 per litre to Sh42.

Brookside, privately owned processor has also upped its price of milk by 17 per cent to Sh40 per litre.

John Gethi, Brookside’s director of milk procurement, said the price review had been necessitated by a change in the prevailing market conditions in the dairy value chain.

The rise in producer price signals high cost for consumers as processors will have to recover the higher cost through the retail market.

However, normal production is expected to pick up in October with the onset of the short rains.

At the same time, grain millers have scaled down on milling creating a shortage of the by-products for animal feeds manufacturers, pushing up the price of the key supplements and setting stage for higher cost to farmers.

Maize and wheat millers have cut down on processing because of unmoving stocks of maize flour on the shelf that has left them stuck with huge quantities of unsold products.

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