Maize price to remain high across East Africa

High maize prices are projected to hold firm in regional markets because of poor production and disruptions in trade flow patterns, a survey by a UN agency shows.

Maize prices remain high across the entire East Africa region despite the entry of initial batches of fresh stocks from the long-rains season, signalling prolonged anguish for households that have witnessed unusually high prices of the commodity since 2007.

“In general, the region continues to experience above-average cereal prices, above the pre-crisis level of June 2007 by a range that goes from 50 to 70 percent on average,” the Food and Agriculture Organisation (FAO) said.

In Kenya, harvesting of the 2009 long-rains season maize crop, which accounts for 80 per cent of the total annual production, is under way and is expected to be completed in January even though the seasonal production is estimated at 1.84 million tonnes — almost 30 per cent below normal levels.

And in what should worry consumers, Kenya and other countries in the region, especially Uganda and Tanzania, are dependent on both formal and informal cross-border shipments to satisfy consumer demand of the commodity and other cereals such as millet and sorghum, meaning the high prices in will impact on their expenditure budgets.

In Kenya wholesale prices of maize in Nairobi reached record level in May, retailing at Sh33,592 ($442) per tonne before dropping to Sh27,664 ($364) per tonne in October, which is still approximately five per cent higher compared to a year earlier.

Institutional requirements

In Tanzania, wholesale maize prices registered a record high of Sh31, 844 ($419) per tonne in Dar es Salaam in August and declined to Sh25,384 ($334) per tonne in October.

This price is still about 30 per cent higher than the same month in 2008.

In Kampala, the wholesale price of maize registered a peak of Sh26,980 ($355) per tonne in April as a consequence of large scale purchases for relief aid and institutional requirements.

Maize price decreased to Sh22,344 ($294) per tonne in August and then inverted its trend to reach Sh26,220 ($345) per tonne in October 2009.

Statistics show that in Kenya, by the end of May, erratic and low rainfall affected maize yields especially in Eastern, Coast and parts of Rift Valley provinces, while the dry weather conditions were severe in north western and eastern pastoral regions, deteriorating pasture availability and livestock conditions with the consequent increase of mortality rates.

Cumulative effects

Estimates show that about 3.8 million people, mainly in the pastoral and marginal agricultural areas, are highly or extremely food insecure.

“Current levels of food insecurity are driven by the cumulative effects of several factors, such as four to five seasons of inadequate rainfall, the lingering impacts of the 2008 poor harvest, high food prices and escalating conflicts for grazing resources, which were all highly detrimental to households’ resilience,” the UN agency said.