Acting Agriculture secretary Adan Mohamed during a media briefing on food security at his Kilimo House Office in Nairobi on September 2, 2015. PHOTO | NJUGI NGUGI
What you need to know:
The sale will be restricted to maize millers and public institutions to lock out middlemen seeking to profit from the sale of the grains that the government had bought at between Sh2,800 and Sh3,000 from farmers.
The National Cereals and Produce Board (NCPB) has cut the price of maize to Sh2,300 and released 2.4 million bags from the strategic food reserve to check the runaway flour prices.
The NCPB has reduced the price a 90-kilogramme bag of maize from Sh2,800 to below the market cost of Sh2,900.
The sale will be restricted to maize millers and public institutions to lock out middlemen seeking to profit from the sale of the grains that the government had bought at between Sh2,800 and Sh3,000 from farmers.
The sale of the 2.4 million bags will be the biggest release of grains from the reserve and the NCPB said it would also help empty their silos ahead of the harvest season that starts this month.
Maize prices have increased from Sh2,200 in February, pushing flour prices to a 13-month high, exerting pressure on households that depend on the grain as a major source of food.
Kenya National Bureau of Statistics data indicates that the price of a two-kilogramme packet rose to an average of Sh115 last month, up from Sh112 and Sh110 in April, on rising maize costs. Flour prices last went above Sh115 in June.
“The prices of maize have been high in the recent days and our aim of selling this maize to millers at a lower cost is to check high prices of maize flour,” acting Agriculture secretary Adan Mohamed told a press briefing in Nairobi on Wednesday.
He said they expect the cost of the two-kilogramme packet of maize flour to drop below Sh100 in the coming days on increased supplies.
Maize prices have a big effect on inflation in Kenya’s economy where it is the staple food and accounts for a significant share of poor households’ budget. Inflation stood at 5.84 per cent last month, down from 6.62 per cent in July.
Currently, the NCPB is holding 4.2 million bags of maize in its depots and earlier efforts to sell the stocks at Sh2,800 to millers hit a snag.
Millers argue that dwindling maize reserves are to blame for the high cost of flour, even as they shun the stocks that the NCPB had allocated them over price and quality concerns.
The millers are currently relying on stocks from Tanzania and Uganda that land in Nairobi at Sh2,800, the same price that the state was offering them.
NCPB managing director Newton Terer said the sale from the strategic reserve aims to create space in the depots.
“We want to create space for oncoming grain as well as check on the skyrocketing prices of maize flour,” he said.
Mr Terer said the millers have purchased 235,000 bags of maize of the 500,000 bags that the government had offered to sell to them.
He said they only want to remain with 1.5 million bags of maize that was purchased last year as they target to refresh the stocks at the depots.
The strategic food reserve normally stores three million bags of maize on behalf of the government for the relief and famine purposes.
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