10 Ways Russia-Ukraine conflict will hurt Kenya
1. Milling products
Kenya imports the bulk of its wheat and maize from Russia and Ukraine to supplement local production. With an ongoing war, millers have raised a red flag over impending shortages of wheat which is milled to make dough to bake bread and pastry. Last year, Kenya imported 2.4 million tonnes of the commodity against 100,00 tonnes produced locally. Millers say the conflict will cause a severe shortage and increase prices. A two-kilo packet of wheat now retails between Sh140 and Sh160.
2. Oil
Oil is the most important source of energy in Kenya. A slight hike leads to an increase in prices of commodities and energy, with products like super and diesel powering industries, transportation, ploughing and cooking. The conflict is already impacting the prices of the commodity, with the cost having hit new highs for the first time in 5 months. Kenya should brace for more price hikes after Egypt said it would raise fees levied on tankers carrying crude oil and petroleum derivatives for ships transiting the waterway from May.
3. Gas.
The uptake of Liquified Petroleum Gas (LPG) has been increasing since 2018 after the Sh18 levy per litre of Kerosene meant to dissuade fuel adulteration. However, prices started rising again after the introduction of a 16 per cent Value Added Tax in July 2021. To cushion Kenyans from higher prices related to the Russia-Ukraine crisis, the National Treasury intends to subsidize the commodity from July 2022 to relieve hundreds of families relying on LPG. In early March, a 3 kg cylinder of gas shot up to Sh3,440, a 6kg cylinder to Sh1.560 and a 35 kg cylinder now retail at Sh8,760.
4. Fertiliser
Farmers have already raised concern over the high cost of fertilizer which is currently retailing at Sh6,000 for a 50-kilogramme bag. With the likelihood of Russia suspending the export of the commodity, prices could surge further, affecting food production in the coming months. The agriculture ministry has indicated it requires Sh31.8 billion to stabilize the prices, linking the current rate to global trends. According to the ministry of agriculture, Di-ammonium Phosphate (DAP) is retailing at Sh6,000, Calcium ammonium nitrate or CAN for Sh3,900 while Nitrogen, phosphorus and potassium is going for Sh4,900. Russia is the world’s biggest fertilizer exporter.
5. Oilseed
These crops are primarily grown for edible oil but have recently attracted more attention due to increasing demand for their healthy vegetable oils, livestock feeds, pharmaceuticals, biofuels and can be substituted for petroleum-based products known as petrochemicals.
6. Vegetable oils
Many vegetable oils are used to make soaps, skin products, candles, perfumes and other personal care and cosmetic products found in many Kenyan households. If the war continues, it will create a shortage of the commodity, leading to price increases. It also has the potential of affecting the beauty industry which has been valued at over Sh100 billion and the manufacturing sectors that use Sunflower oil to manufacture cooking oil. Last year, Kenya imported oilseed worth Sh1 billion from Ukraine.
8. Steel and iron sheets
State Department of Industrialization estimates that direct and indirect consumption of iron and steel in Kenya will increase as development activities envisioned in the Vision 2030 pick up. These include the Lamu port development, railway and roads projects, housing, Industrial parks and special economic zones. It is important to note that the annual estimated imports of iron sheets and steel from Russia and Ukraine are Sh13.4 billion and Sh4.5 billion respectively. The industry forms about 13 per cent of the manufacturing sector and is heavily dependent on imported raw materials.
9. Aluminum
This commodity dominates all facets of Kenya’s life as wire to power the national grid, it is also an ideal material for the production of various items due to its durability, design flexibility, and contributions to energy savings. Washers, dryers, dishwashers, and other appliances employ aluminium frames in their design and the local Jua Kali sector and other fabricators may soon feel the pinch of the war.
10. Paper board
Apart from paper, Kenya also imports paper boards from Russia which is used to make cardboards among other items. The annual imports of paper and paper boards from Russia are estimated at Sh2.1 billion. Paperboard can be single- or multi-ply. Paperboard can be easily cut and formed, is lightweight, and because it is strong, is used in packaging. Another end-use is high-quality graphic printing, such as book and magazine covers or postcards. Paperboard is also used in fine arts for creating sculptures