Food inflation declined to 14.8 percent in June 2017 from 20.0 percent in May 2017 following improved weather conditions which supported significant reductions in prices of key seasonal and quick growing food items. Notable declines between May and June 2017 were witnessed in the following food items: sukuma wiki (Kale) (8.4 percent); Irish potatoes (15.1 percent); cabbages (7.7 percent), and fresh milk (5.9 percent). Government interventions also helped lower the prices of some key food items, particularly sifted maize flour and sugar, which declined by 8.1 percent and 7.1 percent, respectively.
Decline in coffee auction prices by 40 per cent over the February – April 2017 period is attributed to delivery of low quality beans by farmers following end of harvest season.
In the absence of a local oil refinery, Kenya relies on importation of processed petroleum fuels. Between June 2016 and June 2017, domestic pump prices for Motor Gasoline Premium and Light Diesel Oil have increased by 8.56 percent and 7.16 per cent respectively. There was a marginal decline in local pump prices for both fuels by 0.71 per cent and 1.08 per cent respectively between May and June 2017, following decline in international crude prices by around 13 per cent over the period.
Movements in retail petroleum pump prices have over the last year closely reflected fluctuations in prices of international crude oil prices. This implies that shocks in international crude oil markets can translate to higher domestic prices in transportation, energy generation and costs of manufactured goods.