Cereals board to release 700,000 bags of maize for taming flour prices

Nearly 700, 000 bags of maize will be released from the strategic grain reserve to millers at a lower price to curb the rising cost of flour.

The National Cereals and Produce Board (NCPB) says it will sell the maize at below market price to help cool flour prices that have a big effect on inflation given it is the country’s staple food.

“The price of flour had started rising and we believe that the stocks that we are releasing will play a significant role in bringing down the cost,” said the NCPB managing director Newton Terer.

Mr Terer says the maize sale will help the board to refresh the strategic food reserve amid concerns of ageing grains not suitable for flour milling.

The board is selling a 90kg bag of maize at Sh2,300 for the superior grade two and three, grade 4A (Sh1, 600) and grade 4B for Sh1,400.

Millers are buying maize at between Sh2,800 and Sh3,000 for a 90 kilogramme bag, up from Sh2,000 in January.

The price of maize has crossed Sh100 mark over the last two weeks with millers attributing the price to increased cost of the raw material resulting from an acute maize shortage.

The price of a two kilogramme packet of Jogoo brand is retailing at Sh101 from Sh95 in the last two weeks while Soko and Pembe are selling at Sh95 in supermarkets. Millers warned the cost would rise.

READ: Flour price rally looms in cut maize imports

Millers are banking on the Tanzanian crop that will be harvested as from this month, but pointed out that they are not certain whether the stocks will find its way to Southern African countries of Malawi, Zambia and South Africa that have been hit by a severe shortage.

Kenya mainly depends on imports from Uganda and Tanzania to bridge the deficit of 20 million bags annually.

A report by Eastern African Grain Council says that imports from Tanzania dropped 50 per cent compared to grains that were shipped in between October and December.

Imports from Uganda dropped 57 per cent. Maize prices have a big effect on inflation in Kenya’s economy where it is the staple food and accounts for a significant share of poor households’ budget.

Inflation stood at 5.45 per cent last month, down from 6.78 per cent in February and has been falling since the start of the year.

Millers have mopped up stocks in the market and it is not clear whether farmers are hoarding the grain for higher prices as has been the norm.