Kenyan millers have strongly opposed the government’s move to allow Tanzanian firms to bring in wheat flour duty-free, fearing they will be priced out of the market.
Kenya agreed to the imports as it tries to mend business ties with its prickly southern neighbour.
Millers said Tanzania largely relies on cheap imported wheat to mill flour while local millers blend expensive domestic produce with imported ones.
Allowing duty-free imports, they say will make local flour uncompetitive.
They noted that their products attract a 35 per cent duty when exported to regional countries.
“As it currently stands, any wheat product processed in a country and sold to another region incurs a 35 per cent duty,” said Cereal Millers Association.
“Removing this protection and allowing duty free wheat flour from the region would negatively impact the wheat industry, causing great concern to farmers and the millers.”
The Ministry of Foreign Affairs of both countries met on Sunday in Nairobi where they signed new trade deals that would see Kenya lift restriction on imports of wheat flour from Tanzania.
Tanzania has in turn agreed to unblock Kenyan cigarettes and milk. Kenya will also allow Dar cooking gas in the local market.
The millers said Tanzania imports its wheat hence should not enjoy tax incentives under the East Africa Community Customs Union rule of origin which gives preferential treatment to locally produced goods.
The tussle over wheat flour imports into Kenya has been long-standing.
Tanzania reported Kenya to the East African Community Secretariat early this year on the matter.
In April, the Council of Ministers from EAC indicated that Kenya ignored the guidance issued by the secretariat on February 6 allowing wheat products from Tanzania to move to Kenya tax-free under the EAC common tariff.