advertisement

Economy

Maize price rises to record Sh5,849 a bag despite State subsidy

Offloading maize at a cereals board unit in Nairobi. FILE PHOTO | NMG
Offloading maize at a cereals board unit in Nairobi. FILE PHOTO | NMG  

The price of white maize has defied increased inflow of duty-free imports and season’s harvests to rise to an all-time high of Sh5,849 for the 90 kilogramme bag, burdening the poor households more.

The local retail price of maize has risen by 14 per cent in the last 30 days to Friday, overtaking Tanzania, which up to last month was the most expensive market for the staple grain, shows data prepared by Regional Agricultural Trade Intelligence Network (Ratin).

The government introduced a Sh6 billion subsidy in May for imported maize, lowering the cost per bag to Sh2,300 and cutting flour prices to Sh90 per two-kilogramme packet.

The Ratin prices represent the average cost of buying maize in the market that is outside the subsidy programme, grains used in posho mills.

Traditionally, poor Kenyans have relied on flour milled in posho mills, which accounts for about 60 per cent of the staple’s supply, to lower their food costs.

Ratin prices tally with those of the Kenya National Bureau of Statistics that show a kilogramme of maize is retailing at Sh65.27, translating to Sh5,874 for the 90 kg bag.

Apart from Kenya, which has in recent weeks grappled with acute flour shortage, all other markets in East Africa have recorded significant drop in white maize prices over the last 30 days, says Ratin—which tracks agro based prices in the region.

Over the period, retail prices of dry maize have fallen in Uganda by 41 per cent, from Sh5,251 at the beginning in June to Sh3,101 per bag by Friday.

Similarly, Tanzania where maize retailed at Sh5,538 early last month has since recorded a 25 per cent drop in prices according to the Ratin data. In Rwanda, retail prices have also plummeted to Sh3,100 per 90kg bag.

The high prices in Kenya show that almost two months of duty-free imports are yet make impact. And unlike the other regional markets, which have had their retail prices tamed by season’s harvests, Kenya long rains crop was invaded by army worms.

The data shows Kenya’s disproportionately high maize prices have attracted truckloads of the commodity from the landlocked states especially Uganda.

By Friday, 929 metric tonnes (1,021 tonnes) of white dry maize had crossed into the Kenyan markets through the Busia border and another consignment of 4.01 tonnes crossed into the country through the Malaba border.

High cost of food has kept inflation at 9.21 per cent in June, which is beyond the Treasury’s preferred upper limit of 7.5 per cent. The cost of living measure is at the highest levels since five-years ago.

The price jumps are partly caused by drought that has left around 2.7 million people are in need of food aid.

advertisement