Kenya central bank survey: food price rises expected, 76% see farming improving over next year

Respondents in the September agriculture survey of the Central Bank of Kenya (CBK) expected prices of most food items to rise over the month ahead, while 76% expected the farming sector to improve over the next year on forecast above-average rains in October–December 2026, the CBK said in a report published in October 2026.

The CBK interviewed 466 farmers, retailers and wholesalers face to face at markets and farms between 21 and 25 September 2026. Farmers made up 49% of respondents, retailers 38% and wholesalers 13%. Areas covered included the Nairobi metropolitan area, Kiambu, Kajiado, Machakos, Naivasha, Nakuru, Kisumu, Mombasa and Eldoret. The bank runs the survey to inform its Monetary Policy Committee, because food prices feed into headline inflation.

In its summary of the survey, the CBK said it shows moderate upward pressure on inflation from high fuel prices, arising from the conflict in the Middle East. Respondents expect inflation to stay within the target range in the near term, supported by exchange rate stability and an anticipated fall in food prices after the above-average short rains predicted for October to December 2026.

The farm sector grew 4.9% in real terms in the first quarter of 2026, after a 1.3% contraction in the fourth quarter of 2025 that the CBK put down to inadequate October–December rainfall. Citing the Kenya National Bureau of Statistics, the report said tea output rose 3.1% year on year to 141,100 metric tonnes in the first quarter.

Monthly price changes for most sampled foods were larger in September than in August, particularly for milk products, wheat flour and edible oils. Cabbages, unpeeled garden peas, green maize and loose maize grain also rose in price. Spinach, tomatoes and onions eased, with tomato supply helped by dry weather and imports from Tanzania.

Looking one month ahead, the share of respondents expecting a rise in the price of sifted maize flour went from 19% in August to 40% in September. For fortified maize flour it went from 31% to 47%, for white wheat flour from 29% to 48% and for sugar from 15% to 28%. For fresh packeted cow milk, the balance of opinion (the share expecting a rise minus the share expecting a fall) swung from 3% for a fall in the August survey to 74% for an increase in September. The CBK linked the milk expectation to the depressed March–May long rains, which hit pasture and cut supply.

Respondents named weather conditions (97%), transport costs (92%), input prices (80%) and distance to market (71%) as important drivers of current prices. Middlemen were cited by 62% and labour costs by 60%. The report said 52% saw a significant effect on retail prices from the US-Israel-Iran war through global oil prices, and 58% attributed part of the price rises to disruption of global supply chains. It put the OPEC Reference Basket at about US$100 a barrel in September 2026. US tariffs were cited by 13%.

The share of respondents expecting inflation to rise in the next month went up to 64% in September from 53% in August, while the share expecting a rise over three months eased to 61% from 63%. Both were lower than in April 2026, when 81.4% expected an increase over both horizons, and in May, when 65.4% expected a rise in the next month and 64.3% over three months. The CBK said the September increase largely reflected concern about unfavourable weather in food-growing areas and about energy and oil prices.

On crops, the balance of opinion on acreage was mostly positive across the sampled crops. It stood at 50% for wheat, 37% for potatoes, 30% for millet, 27% for rice, 26% for maize and 22% for beans. For output, the balance of opinion was 55% for rice and 38% for tomatoes, down from 54% for tomatoes in July. The report said October–December is expected to be a rainy season mostly unsuitable for tomatoes, and that concern about crop destruction from excessive rain and flooding held back output expectations.

Optimism about the farm sector over the next three months was 66%, against 67% in July. Over the next year it rose to 76% from 67%. For the overall economy, 57% expected improvement over three months, against 59% in July, and 56% over one year, against 59%.

Of the farmers sampled, 79% said they had benefited from subsidised fertiliser, and more than 80% named it the most critical government intervention for production. Irrigation use is limited: 76% of farmers depend mainly on rain-fed farming.

Borrowing to finance farming was reported by 45% of farmers, up from 34% in July. Borrowing from savings and credit cooperative societies (SACCOs) was reported by 32%, against 17% in July, and from commercial banks by 29%, against 21%. Family and friends were a source for 29%, against 38%; informal savings and credit groups for 22%, against 16%; and digital lenders for 13%, against 16%.

Farmers asked for generators, pumps and piping for irrigation, larger subsidies and grants, better feeder roads and cheaper fuel. The CBK's recommendations included sustaining measures to cut the cost of certified seeds, fertiliser, farm machinery and pesticides, strengthening extension services and keeping measures to reduce fuel costs, given the role of diesel in farming and transport.