Maize millers have ruled out a cut in the price of flour even as the NCPB offered to sell to them grain at a cheaper price. PHOTO | FILE
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The State intervened last month by making part of the two million stocks held as strategic grain reserves available to millers at Sh2,800, which is below the market price of Sh3,000, in order to tame skyrocketing prices of the staple.
Maize millers have ruled out a cut in the price of flour even as the National Cereals and Produce Board (NCPB) offered to sell to them grain at a cheaper price.
The millers now say that the cost of flour will be determined by market forces of demand and supply, going against government directive that required the manufacturers to bring down the price after getting cheaper stocks from NCPB.
The State intervened last month by making part of the two million stocks held as strategic grain reserves available to millers at Sh2,800, which is below the market price of Sh3,000, in order to tame skyrocketing prices of the staple.
“Cereal Millers Association cannot give direction on the pricing as this will be determined by the market dynamics,” the association said in a statement. The millers last month increased the price of a two kilogramme packet of flour from an average of about Sh86 in January to Sh105, citing high cost of maize.
NCPB has allocated maize to the flour companies based on their milling capacities, but three weeks since the produce was made available they had only purchased 9,204 bags as of yesterday.
“We do not know the arrangement that the millers have because so far they have only bought a smaller fraction of the stocks made available,” said NCPB managing director Newton Terer.
The MD said large-scale millers have been allocated 55 per cent of the entire stocks while the remaining quota has been given to small-scale millers.
Acting Agriculture secretary Adan Mohamed said millers have not rushed to exhaust the stocks at NCPB because they have started receiving maize from the traders who have been hoarding.
“Traders are now releasing what they have been holding to the market because they fear that they may end up selling at a lower price when the millers start getting stocks from NCPB,” said Mr Mohamed.
His sentiments were echoed by the Principal Secretary in the ministry Sicily Kariuki who said there is now movement of grain in the market since the government made an announcement of selling cheap maize to millers.
East African Grain Council said millers are relying on traders for their stocks.
“There are stocks that are coming in from Uganda and Tanzania and this is what millers are banking on at the moment to make flour,” said Janet Ngombalu, head of marketing at the grain council.
Cereal Growers Association of Kenya (CGA) accused millers of creating a situation of maize shortage in the country in order to justify an increase in the price of flour.
“There was no shortage of maize in the country but millers wanted to create that scenario in order to justify the increased cost of flour,” said Mr Anthony Kioko, chief executive CGA.
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