Kenya in deal with Tanzania to cool rising maize prices


Agriculture secretary Felix Koskei (left) with his Tanzanian counterpart Christopher Chiza after briefing the media on national food security, in Nairobi on Thursday. Photo/SALATON NJAU

Kenya has inked a deal to buy 2.4 million bags of maize from Tanzania’s strategic reserves in an attempt to cool down runaway maize and flour prices.

Agriculture secretary Felix Koskei and his Tanzanian counterpart Christopher Chiza on Thursday signed a memorandum of understanding which allows traders to tap Tanzania’s National Food Reserve for maize destined for Kenya.

The traders will buy the commodity at Sh2,650 and Tanzania has committed to ferry the grains to Nairobi and Mombasa at Sh300 for every 90kg bag.

A biting maize shortage has raised the cost of a 90 kilogramme bag in Kenya to Sh3,200, up from Sh2,900 in April and Sh2,500 in October. This has seen the price of a two-kilogramme packet of flour rise by Sh12 since April to an average of Sh122.

Maize millers have been warning that Kenyans will continue to dig deeper into their pockets for the staple food until the harvest season in August.

Mr Koskei said the Tanzanian maize will land before Kenya’s harvest season as the country races to manage rising inflation and boost food security.

“The consignment that we will get from our neighbours will play a major role in bringing down the cost of flour that is currently beyond the reach of majority of Kenyans,” said Mr Koskei at a press briefing.

The price of flour milled at posho mills has also increased to Sh48.97 per kilogramme from Sh42.76 last year and Sh46.54 in May, according to the Kenya National Bureau of Statistics (KNBS).

Frequent poor weather has hit Kenya’s farm-based economy hard and officials warn that the delayed rains may cut maize production by five million bags against the targeted 40 million this year.

READ: Kenya stares at food crisis as maize reserves drop

Kenya’s strategic maize reserve held at the National Cereals and Produce Board (NCPB) has dropped to half of the optimum level of five million bags, underlining the food crisis facing the country.

Last month, NCPB said it was holding 2.5 million bags, adding that delayed settlement of Sh5.9 billion owed to it by the government had made it difficult to buy maize from farmers this year.

Currently, millers are relying on maize stocks from Uganda. They claimed that some farmers were hoarding the grain in anticipation of higher prices in the coming months.

READ: Maize hoarding pushes up flour prices

Diamond Lalji, the chairman of Cereals Millers Association which comprises nearly 30 major millers in Kenya, welcomed the deal which was initiated on June 5.

“This move will go a long way in containing high prices of maize in the country, hence reduce the cost of flour,” said Mr Lalji. Unlike Kenya, Tanzania posted a bumper harvest this year.

“Tanzania harvested 5.3 million tonnes (58 million bags) of maize this year, hence registering a huge surplus. As a result, the government of Kenya requested that we sell them part of our stocks in order to curb the shortage,” said Mr Chiza.

The consignment, said Mr Koskei, will cease after the harvest season in mid-August to cushion local farmers from low prices.

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’ budgets.