A man shops for maize flour at a Nairobi supermarket. Food prices have a big effect on inflation. PHOTO | FILE
What you need to know:
The price of a two kilogramme packet of flour is in the Sh105 range up from Sh86 in January.
Millers faulted for refusing to lower costs even as NCPB reduced the prize of maize.
Millers have kept flour prices high despite imports of cheaper maize from neighbouring Tanzania and Uganda, citing high cost of the grain.
The price of a two kilogramme packet of flour is in the Sh105 range up from Sh86 in January.
The farm gate price of a 90-kilogramme bag of maize has since dropped to as low as Sh2,200 from Sh3,000 at the beginning of the year in the country’s grain basket areas of Trans-Nzoia and Uasin Gishu.
The Cereal Growers Association (CGA) of Kenya has faulted millers for selling flour at an exorbitant price.
“Millers have refused to lower the cost of maize flour and it remains high despite the low cost of maize,” said CGA chief executive Anthony Kioko. Mr Kioko noted that maize supplies in the country had increased and millers were getting stocks with ease.
The millers, however, maintain that the price of flour is determined by market forces of demand and supply.
They have gone against a government directive to the effect that the National Cereals and Produce Board should cut the price of maize and they can in turn reduce the cost of flour.
The state intervened last month by making part of the two million bags of maize held as NCPB’s strategic 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.
The Eastern Africa Grain Council (EAGC) has rooted for a stakeholders’ forum to discuss the ideal price of maize flour.
“There should be a consultative meeting between millers and other stakeholders to discuss trends in the current prices,” said Janet Ngombalu, head of marketing at EAGC.
Food prices have a big effect on inflation. Maize is the staple food in the country and accounts for a significant share of poor households’ budgets.
Inflation has been rising steadily since January to an eight-month high of 7.08 per cent in April, before slowing to 6.87 last month, driven by an increase in food prices.
The Competition Authority of Kenya (CAK) is currently investigating allegations of price fixing by maize traders and millers.
CAK director-general Kariuki Wang’ombe said the agency was seeking evidence which will lead to legal action against those found culpable. The investigations began last month.
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