Millers warn of maize shortage as farmers hoard for higher prices
A worker at miller carries a bundle of maize flour from the store. Cereal Millers Association chair Diamond Lalji has said the cost of flour may go up soon. FILE
What you need to know:
Millers say they are paying farmers Sh3,100 per 90 kilogramme bag of maize compared to the Sh3,000 offered by the National Cereals and Produce Board (NCPB) in order to attract more stocks.
They propose that the import duty on maize be withdrawn and genetically modified substitutes be allowed into the country to address the shortage.
Imported maize attracts a 50 per cent duty in addition to 1.5 per cent Railway Development Levy.
Hoarding of maize by farmers who are holding out for higher prices has left millers grappling with shortages that could see flour become more expensive.
Millers say they are paying farmers Sh3,100 per 90 kilogramme bag of maize compared to the Sh3,000 offered by the National Cereals and Produce Board (NCPB) in order to attract more stocks. A shortage of maize is projected from June.
“As a matter of urgency, we want these issues to be addressed within the shortest time possible in order to save Kenyans from high prices of maize flour in the near future,” Cereal Millers Association chairman Diamond Lalji states in a letter to Agriculture secretary Sicily Kariuki.
The millers propose that the import duty on maize be withdrawn and genetically modified substitutes be allowed into the country to address the shortage.
Imported maize attracts a 50 per cent duty in addition to 1.5 per cent Railway Development Levy.
Malawi is facing a shortage while Zambia has banned exports, leaving Kenya with fewer options on where to obtain the 7.4 million bags deficit. The two countries have been supplying Kenya with white maize during shortages.
Of the 32 million bags of maize that were expected to be harvested from last year’s crop, only 13 million bags are left in the market according to a ministry of Agriculture status report on December 31, 2013.
NCPB managing director Cornel Ngelechey said supplies from farmers were dwindling, with an average of 13,000 bags being delivered per day compared to 15,000 bags previously.
“There might be a possibility of large scale holders and traders hoarding the produce. We are waiting to see what will happen in the next two weeks to ascertain the real situation,” said Mr Ngelechey.
In 2011 hoarding by farmers pushed the price of maize to Sh4,500 per 90 kilogramme bag, prompting the price of a two-kilogramme packet of flour to jump from Sh105 to Sh150.
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