Cheap maize from NCPB is unfit for humans, millers say

Millers say the stock of maize the National Cereals and Produce Board (NCPB) is releasing from the Strategic Food Reserve will not curb the rally on flour prices because it is not fit for milling.

The millers umbrella body, Cereal Millers Association (CMA), reckons that the grade two maize the NCPB is selling can only be used to make animal feeds.

Nearly 700,000 bags of maize were released on May 13 from the strategic grain reserve to millers at a lower price to curb the rising cost of flour.

The board is selling a 90 kilogramme bag of maize at Sh2, 300 for the superior grades two and three, grade 4A (Sh1,600) and grade 4B for Sh1, 400.

This is below the market price of between Sh2,800 and Sh3,000 for a 90 kilogramme bag, up from Sh2,000 in January.

“NCPB is not selling any grade 1 maize and hence this maize being sold will not affect the human food chain, therefore causing no effect on the price of maize flour,” said CMA chairman Nick Hutchinson.

Mr Hutchinson said even if the stocks were grade one, the 700,000 bags would have little impact on flour prices because they can last for only 12 days. Kenyan millers have capacity of 50,000 bags per days.

The price of flour crossed the Sh100 mark in April with millers attributing the rally to the rising cost of maize due to an acute shortage.

The price of a two kilogramme packet of Jogoo is retailing at Sh101, up from Sh95 two weeks ago, while Soko and Pembe are selling at Sh98 in supermarkets. Millers had earlier warned that the cost would rise.

NCPB hoped the subsidised maize would help cool flour prices which have a big effect on inflation given it’s the country’s staple food.

READ: Cereals board to release 700,000 bags of maize for taming flour prices

“As you are aware, the price of flour had started raising and we believe that the stocks that we are releasing will play a significant role in bringing down the cost,” NCPB managing director Newton Terer said in an earlier interview.

Millers are banking on the Tanzanian crop that will be harvested from this month, but pointed out that they were not certain whether the stocks will find their way to Southern African countries of Malawi, Zambia and South Africa which have been hit by a severe shortage.

Kenya mainly depends on imports from Uganda and Tanzania to bridge the annual deficit of 20 million bags.

Maize prices have a big effect on inflation and accounts for a significant share of poor households’ budgets.

Inflation stood at 5.27 per cent last month, down from 6.45 per cent in March, and has been falling since the start of the year.

Millers have mopped up stocks in the market and it is not clear whether farmers are hoarding the grain in anticipation of higher prices as has been the norm.