Food prices expected to decline despite inflation rise, CBK survey reveals
The July 2025 CBK agriculture survey showed that while inflation rose slightly to 4.1 per cent in July compared to the same period last year, most farmers remained confident that the sector would stay strong.
Food prices could decline in the coming months despite the recent rise in inflation, a recent survey by the Central Bank of Kenya (CBK) has revealed.
The July 2025 CBK agriculture survey showed that while inflation rose slightly to 4.1 per cent in July compared to the same period last year, most farmers remained confident that the sector would stay strong.
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According to the findings, 82 per cent of the farmers projected vibrancy in the sector over the next three months, while 86 per cent expected further improvements in the next year, a slight dip from 89 per cent in May.
“The high level of optimism was mainly informed by the observed favourable rainfall outcomes and expected continuation of government interventions aimed at increasing productivity of the sector,” reads the report.
The survey also revealed that respondents expect food prices to ease as harvests from the current season reach the market.
“What this means is that you, as a consumer, are expected to experience some relief in food expenditure if key inhibiting factors get addressed,” the report noted.
According to the report, respondents expect the prices of rice to decline in August 2025 as favourable weather conditions have supported domestic production, complemented by imports. It adds that global rice prices have been declining due to increased production in key rice-growing regions.
However, about five per cent of the sampled respondents expect sugar prices to increase one month ahead. CBK says the expectation was largely driven by the observed increases in sugar prices in July 2025 relative to June 2025, uncertainties about sugar prices following the leasing of sugar companies to private operators, a reduction in cane deliveries to factories and possible shutdown of sugar factories for periodic maintenance.
Despite the concerns about sugar prices, the survey maintained that food prices are in general expected to remain stable with a downward bias in view of the favourable March-May long rain season in most regions.
“This is expected to continue supporting fast-growing vegetable items, particularly kales, sukuma wiki, carrots, potatoes, onions, traditional vegetables, cabbages and spinach,” reads the report.
Although the Consumer Price Index (CPI) has shown slightly lower prices, CBK highlighted that retail prices were still largely influenced by transport and weather conditions, cited by 86 per cent and 84 per cent of respondents respectively.
“Government efforts to expand and maintain rural feeder roads should, therefore, be enhanced to ensure a continuous market supply of food commodities and also to reduce post-harvest losses,” farmers recommended in the survey.
Experts have also warned that insufficient funding for the agriculture sector could derail food security goals.
In the 2025/26 financial year, the National Assembly’s Agriculture and Livestock Committee reported an underfunding of Sh14.53 billion, highlighting the sector’s budgetary gap.
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