Millers have started purchasing local maize to build up stocks at a time supply under the subsidy programme is tightening following the closing of duty-free import window.
Millers argue there is a likelihood of not getting enough maize when the subsidy ends on December 31, an event likely to spark off another round of high flour prices.
“Our members have started buying but we are not getting enough stocks from the farmers and this is likely to create a shortage on our side once the government stops supplying us with the cheap maize,” said Cereal Millers Association.
The subsidy programme was supposed to end last month, but the government pushed it to the end of December for fear that its termination would result in higher consumer price of flour.
Currently, millers are getting limited stocks under the subsidy programme due to high demand.
“Whatever we are getting now is hand-to-mouth and at times we are unable to meet the daily orders from our customers,” said the association.
The government said mid this month that it will supply millers with 1.8 million bags to run until the end of the programme.
As at November 14, the Strategic Food Reserve (SFR) had a total of 700,000 bags of maize while another consignment of 1.1 million bags was being offloaded at the Port of Mombasa.
The millers are not milling the maize from local farmers for now because they are acquiring it at above Sh3,000, hence cannot compete with the Sh90 subsidised flour.
Kenya in May started subsidising maize importers to help lower the retail cost of flour that had shot to a historic high after a prolonged drought.
Under the subsidy programme, the government sells maize to millers at Sh2,300 for a 90 kilogramme bag despite buying at above Sh4,000.
National Cereals and Produce Board (NCPB) is also currently buying maize from farmers and has so far received 500,000 bags of the produce.