Maize farmers on the spot as flour prices increase

Agriculture ministry has accused farmers of hoarding maize in anticipation of higher prices even as concerns grow over its failure to build a strategic reserve.

Cabinet Secretary Willy Bett wondered why the main rain crop harvest in the North Rift had not been released in the market.

“We want farmers to know that we are bringing in maize and whoever is still hoarding will suffer low prices since some of them have refused to release their stocks at the current good prices,” Mr Bett told the Business Daily.

Mr Bett said a multi-agency team is assessing the food situation in order to advise the government on the tonnage required and other logistics involved.

The government had projected the 2016 harvest at 32 million bags but so far the National Cereals and Produce Board (NCPB) has only bought about a million bags from farmers across its depots countrywide.
By policy, the country needs to stock up to eight million bags as strategic reserve to cushion households from wild price swings during shortages. Last week, NCPB managing director Newton Terer said the national granary was holding a total of 1.5 million bags.

“We are currently in possession of 1.5 million bags at the Strategic Food Reserve (SFR) but we are still hoping to buy more from the farmers,” said Mr Terer.

The long queues that normally characterise NCPB at this time of the year are lacking with the regional managers at different depots saying there is minimal activity at the moment.

NCPB is buying a 90 kilogramme bag of maize at Sh3,000 while millers are paying Sh3,400 for the same quantity, a move that has pushed up the price of flour beyond Sh115 per two kilo packet.

READ: Kenya eyes Mexican maize as neighbours block exports

Kenya was last hit by a maize flour crisis in 2011 when a 2kg packet retailed at Sh140 in the wake of a serious shortage of maize. This was the highest maize flour price to have been registered in a decade.

Millers said the rapid rise in the price of maize flour was being driven by the fact that a 90kg bag of maize is now selling at Sh3,400 compared with Sh2,800 last year.

Kenya normally imports grain from Uganda and Tanzania to bridge the deficit in production. Tanzania has restricted export of maize while Uganda did not register a good crop in the last season, with the little that is available finding its way to South Sudan where it fetches a good price.

Apart from these two east African nations, the next alternative for Kenya’s maize imports is normally Malawi and Zambia.

However, these two countries have registered a poor crop too in the last two seasons owing to poor weather resulting from La Nina, which hit the Southern Africa countries last year.