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Economy

Opening of EAC market hurts rice millers

Rice being harvested. Rice millers in western Kenya face a bleak future as farmers sell their produce to Ugandan and Rwandese middlemen who offer them prompt payments and inputs. Photo/File
Rice being harvested. Rice millers in western Kenya face a bleak future as farmers sell their produce to Ugandan and Rwandese middlemen who offer them prompt payments and inputs. Photo/File 

Rice millers in western Kenya face a bleak future as farmers sell their produce to Ugandan and Rwandese middlemen who offer them prompt payments and inputs.

The export of paddy has left Kibosi Miller, the largest in western Kenya, running at less than a quarter of its milling capacity.

Mr Washington Bwire, the managing director of the Lake Basin Development Authority which owns the mill, said the opening of the East Africa Common market had seen businessmen buy rice directly from farmers for export to Uganda and other countries.

Mr Lucas Oduor, a farmer, said that foreign buyers particularly from Uganda offered better terms.

“Whereas a Kenyan buyer offers Sh3,000 for 50kg of paddy, a Ugandan gives Sh4,500,” said Mr Oduor at BunyalaIrrigation Scheme.

Cheap imports

Paddy is the raw crop which is milled into rice. According to the National Cereals and Produce Board, Kenya produces 50,000 tonnes of rice against an annual demand of 250,000 tonnes.

The gap is filled through cheap imports, especially from Vietnam and Pakistan.

According to the Oryza Global Rice report for last month, Vietnam and Pakistani rice is produced at Sh33,970 and Sh34,830 per tonne respectively.

“After duty and everything else are paid, imported rice retails in Kenya at less that Sh70 per kilogramme against Sh90 per kilogramme for locally produced rice,” Mr Bwire said.

The Kibosi mill sells rise at Sh105 per kilogramme, which is in turn sold at Sh125 per kilogramme at Kisumu supermarkets.

Rice is Kenya’s third most important food after maize and wheat.

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