KENYA – The New Kenya Cooperative Creameries (NKCC) has asked the Kenyan parliament to allocate KES3 billion (US$23.9M) for the implementation of a milk powder reserve fund for the stabilization of prices during glut and deficit.

New KCC is state-owned milk processor engaged in the processing and marketing of milk and milk products in the country.

The company is one of the largest dairy processors in the country and has a range of dairy products including milk, yoghurt, butter, cheese, ghee and cream milk powder.

NKCC said the Strategic Milk Powder Fund was established in law in 2016 and will be used for mopping up excess milk when there is glut, converting excess into milk powder and for release into the market when there is a shortage.

The company further communicated to the National Assembly’s Trade, Industry and Cooperatives that it would need KES500 million as initial seed capital million to complete the modernization and upgrade of milk processing equipment.

The government had recently spent KES 2 billion to modernize some of the New Kenya Cooperative Creameries factories in seven counties to build capacity for dairy farmers.

The factories situated in Uasin Gishu, Bomet, Nyahururu, Nyeri, Trans Nzoia, Meru and Mombasa have been revamped to build capacity for dairy farmers.

As part of the modernization plan, former CS Munya launched a new factory in Igember South, Meru county with a capacity to process 100,000 litres per day.

The factory was a relief to farmers who were previously forced to take their produce to Meru town, increasing their production costs.

Together with the enhanced processing capacity, there was a growth in annual sales and an increase in farmers’ payments to the current KES 5 billion, according to the organization’s website.

According to data from the Kenya Dairy Board, the state-owned dairy processor increased its share in the market from 23% (2016) to 35% (2021) after the upgrading of factories in Eldoret and Dandora.

Shortages of milk due to climate change have however negatively impacted the dairy sector, sending retail prices higher and forcing the country to import the commodity.

Early last year, leading processors adjusted their prices by between Sh2 and Sh5 for a 500ml packet of fresh and long-life brands due to the ongoing drought in most parts of the country.

The situation would not have been as dire if processors did have stocks of powdered milk, which is normally reconstituted into fresh when there is a shortage in the country.

With greater capacity, NKCC is now turning its eyes on milk stabilization to ensure Kenya, which has one of the highest per capita milk consumption rates in Africa never lacks the precious commodity.

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