Shortage of maize sets the stage for imports

The total stock of maize in Kenya can only last up to July, the latest government statistics have indicated, supporting the case for duty free imports.

A report on the national food situation released last week by the Ministry of Agriculture indicated that maize stocks held by farmers, traders, millers and the National Cereals and Produce Board (NCPB) stood at 16.9 million bags at the beginning of May.

Agriculture permanent secretary Dr Romano Kiome said the stock was only likely to last for three more months, justifying the case for scrapping the 50 per cent duty on maize imports.

“Due to low level of the strategic grain reserve stocks held by NCPB, importation of maize by the private sector is advised,” said Dr Kiome in the report issued after a closed-door meeting at the Prime Minister’s office.

Farmers are holding 10.9 million bags, traders 2.4 million, millers have 519,530 bags with National Cereals and Produce Board (NCPB) is holding 3.1 million bags – against a target of 8 million bags - as the strategic reserve.

The report released last Thursday came almost three weeks after Prime Minister Raila Odinga promised Parliament that the government would scrap duty on maize and wheat imports after conducting a national food survey.

Maize is the country’s staple food with a national consumption rate of 3.5 million bags a month.

The report says large-scale farmers have refused to release their stocks into the market, meaning only the 2.9 million bags held by traders and millers are in circulation.

This artificial scarcity has forced national prices up at a time that cross border inflows have also dropped due to drought that affected short season production across the region.

The national maize prices have hit a 13-month high of Sh3,000 in most parts of the country — up from Sh1,000 at the close of last year — according to the ministry’s data.

The price of a two-kilogramme packet of high grade flour has risen to Sh100 from Sh72 at the beginning of the year while wheat flour is now priced at Sh130 from Sh115 in January.

“The prevailing market prices have raised the cost of every two-kilogramme packet of dry maize at Sh66, long before other factory overheads and distribution costs are factored in,” said Munir Sabit, finance officer at Mombasa Maize Millers.

The government report indicates that only 24,202 bags of maize got into the country from Uganda and Tanzania last month, a 35 per cent drop from March inflows.

This decline defied rise in the prices of dry maize from Sh2,300 to Sh2,700 per 90-kg bag over the same period.

“Traditionally, the national maize stock is partly cushioned by maize inflows from neighbouring countries, especially Uganda and Tanzania,” says the Assessment Report, adding that inflows from neighbouring countries have generally declined since February this year.