Economy

Cereals traders reap as demand rises

Cereals traders are recording booming business as demand rises and crop yields from regional States reduce due to erratic weather.

Maize farmers are reaping big from rising demand that pushed the cost of the commodity beyond the Sh3,000 offered by the National Cereals and Produce Board (NCPB) as millers rush to purchase the produce to bolster their stock due to the anticipated shortage.

Rising demand for maize in South Sudan has also contributed to better prices especially in the country’s food basket of the North Rift.

Traders in the region are exporting maize to South Sudan through Uganda even as the government introduces measures to curb impending food shortage caused by depressed production this season.

“Maize prices are likely to increase further as the local and regional demand for the produce rises,” said Mr Patrick Langa’t, a food and agriculture expert.

The cereals board had by last week purchased approximately 410,000 bags of maize valued at Sh1.2 billion in the North Rift as price rivalry with private millers intensified.

While the NCPB targets to purchase up to 2 million bags at Sh3,000 per 90 kilo, some private millers and middlemen have raised the prices from Sh2,600 to Sh3,200 to bolster their stock to the relief of farmers who have for the last two years contended with low prices.
“We anticipated the maize deliveries to our buying centres to increase due to attractive prices offered and availability of funds to pay the farmers,” said Mr Newton Terer, the board managing director.

The Ministry of Agriculture has confirmed the rising demand for maize with Cabinet secretary Willy Bett warning that uncontrolled export of the produce will hurt the country’s food security situation.

“There is increased demand for maize and if unchecked the export of the produce will adversely affect the local food stocks,” warned Mr Bett.

Anticipated shortage
The country requires 3 million bags of maize for Strategic Grain Reserve (SGR) for emergencies such as famine. But the majority of maize farmers in the North Rift region are hoarding the produce owing to anticipated shortage.

Maize prices have increased in the last two months due to reduced supply, pushing the cost of living beyond the reach of most households.

A bag of maize is going for Sh3,000 up from Sh2,600 while that of wheat is selling at Sh3,600 up from Sh3,200 as most farmers reserve the crop to cushion themselves against the impending shortage.

“Food shortage is unavoidable as a result of erratic rainfall that interfered with smooth planting programme,” said Ms Susan Kong’ato from Sergoit, Uasin Gishu County.

She has 14 bags of maize which is sufficient for her family of five before the next crop is ready. “I consume an average of 10 bags but I have to keep the rest as security in case the next crop fails,” said Ms Kong’ato.

Some of the farmers reduced acreage under crop production this season due to high cost of farm input as agriculturalists warn of food shortages due to unreliable rainfall.

Maize production in the North Rift region declined by 20 per cent from 21 million to 16 million bags last season due to erratic and low rainfall during plating season that led to poor germination.

Uasin Gishu County produced an average of 4.5 million bags of maize last season but the yield is expected to drop this season after the crop was destroyed by a dry spell and heavy rains during harvest.

Maize production in Trans-Nzoia County dropped from 5 million to 4.7 million bags last season and the yield is expected to fall further this year owing to low quality fertiliser and erratic rainfall.

“What farmers require is sufficient capital to enable them to invest in modern crop production and not to sell our maize produce at throw away prices,” Musa Barno, Kenya National Federation of Agricultural Producers (Kenfap) Uasin Gishu branch chapter.

The NCPB purchased 1.6 million bags of maize for Strategic Grain Reserves last season. It suspended buying the produce after exhausting the Sh2.7 billion allocated in the 2014/2015 financial year.

It was allocated Sh 1.6 billion this financial period which the cereal farmers have termed as too low to mob up the produce at the current competitive prices.

The board has generated Sh 4 billion from sale of old stock from NCPB and another Sh 2.5 billion from release of one million bags totalling to Sh 8.1 billion set aside to buy this season’s maize crop.
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