Rising maize farmgate prices spark inflation fears

Maize farmgate prices have gone up by 45 per cent in one month, sparking fears of rising inflation in the coming weeks after the weatherman warned of depressed April-June rains.

A bag of maize now costs Sh2,600 from Sh1,800 last month as speculating traders— buoyed by Tanzania’s restriction on cross-border grain sale —stash away the commodity in anticipation of higher prices in the coming months.

“We have seen a quick increase in price of maize within a very short time and we are still finding out what could be triggering this fast movement,” said Anthony Kioko, chief executive of Cereal Growers Association.

The sudden price swing, though a boon to farmers who have been grappling with low selling price, comes as a burden to households already grappling with high cost of maize flour.

The traders have flocked the North Rift region to mop up stocks from growers who have been holding on to their produce after rejecting the Sh2,300 offered earlier by the National Cereals and Produce Board.

Mr Kioko, however, maintained that the current price level does not warrant immediate increase in price of flour.

“Millers should ensure that consumers benefit from the low cost of raw material as the current increase in price is not commensurate with the margins at which they have increased the price,” he said.

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Cereal Millers Association, flour producers’ lobby, said speculation in the market has created an artificial shortage, raising the cost of maize.

As a result, the millers argue that high cost of raw material (maize) has pushed up the ex-factory price of flour from between Sh84 and Sh87 in February to Sh95 and Sh100 this month, representing a 13 per cent increase.