Specialty maize flour hard to find after State subsidy

The middle class has been hit by a shortage of high-end flour and dairy brands, with the shortage of maize and milk forcing producers to concentrate on the mass market.

The premium Hostess brand of maize flour, which is processed by NSE-listed company Unga Limited #ticker:UNGA, has been missing in the shelves since late April.

Also missing from shelves is butter and milk powder, with processors say they have reduced production to concentrate on fresh milk due to shortage.

Before disappearing from the shelves, a two kilogramme of Hostess was retailing at Sh180 compared with Sh130 for other flour before government intervention that set the price of flour at Sh90.

“Because of the subsidy programme, the government wanted us to focus on the mass market with available stocks and not the specialty one, that is why we stopped milling Hostess,” said Nick Hutchinson, chief executive officer of Unga Limited.

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Mr Hutchinson said processing of this commodity will start once the supply of maize in the market has improved.

Butter, which is manufactured by Brookside and the Kenya Cooperative Creameries (New KCC), have been in short supply.

“The supply of butter has not normalised but at least we have some stock on the shelves,” said New KCC managing director Nixon Sigey.

The butter that is available is retailing at much higher price. The new KCC brand is now selling at Sh800 for a half kilogramme from Sh500.

Drought that hit most parts of the country saw milk processors cut down on production of high value commodities such as butter and powdered milk to concentrate on the fresh product.

Milk volumes, according to Kenya Dairy Board (KDB), have improved by 20 per cent.

This is, however, not sufficient to warrant full production of the high-end products.

READ: Retailers defy subsidy to sell maize flour at Sh119