Kenyan grain traders lock horns with Ugandan rivals

Ugandan middlemen have accused Kenyan traders of locking them out of the maize market by buying directly from farmers and millers.

The Ugandans also accused Kenyans of entering into long-term contracts with millers in Nairobi, making it difficult for them to get a share of the Kenyan market.

The row opens a new battle front among regional traders in a common market that provides for free movement of goods.

The launch of the East Africa common market on June 30 allowed Kenyan traders to enter Uganda and buy grain at farm gates, cutting off Ugandan middlemen from the supply chain.

Before the common market came into effect, Kenyan traders had to buy the commodities from Ugandan middlemen at the border towns of Busia and Malaba.

“They say Kenyan traders are beginning to take advantage of unhindered travel deep into Uganda to source for goods, ignoring Ugandan middlemen.

“Given their (Kenyan) connection to millers and other markets, Ugandans feel they stand to lose,” said Jackson Kihara of the Regional Agricultural Trade Intelligence Network (RATIN).

Of the five countries that form the East Africa Community, only Rwanda and Uganda produce grains that surpass consumption, with the surplus feeding deficit markets such as Kenya.

Regional trade data indicates that Kenya is the highest importer of grain from the region followed by Tanzania.

Locked out

The Ugandan middlemen say they have been locked out of the Kenyan market by the long term supply contracts that Kenyan traders have signed with millers, according to a brief by RATIN.

Among the grains whose demand in the region continues to drive cross border trade are maize, beans, wheat, millet, and sorghum.

Demand for grain in Kenya, especially maize, remains significantly high compared to Uganda given that prices in Kenya are higher.

One metric tonne of maize in Uganda is sold at $104, which is 40 per cent cheaper compared to Nairobi where the same is sold at $171.