Commodities

Flour price to remain high as State fails to get cheap maize

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Agriculture Cabinet Secretary Mithika Linturi. FILE PHOTO | LUCY WANJIRU | NMG

Kenyans will continue waiting for cheaper flour after it emerged that the government's search for cheap maize was facing headwinds on limited supply of the grain on the international market.

The Ministry of Agriculture has opened negotiations with traders aimed at reviewing the Sh4,200 per 90-kilo bag that the government had issued to maize importers as the landing price under a duty waiver.

Agriculture Principal Secretary Harsame Kello says it has become difficult for traders to find cheap maize owing to a tight competition with other African countries such as South Sudan, which is offering higher prices.

The government had entered into a memorandum of understanding with traders in February, where they agreed that the grain would land in Kenya at Sh4,200 in order to have an impact on the price of flour locally.

“Importers failed to match the price that the market is demanding out there because of a scarcity in the world market, we are now negotiating on a new price with the traders,” said Mr Kello.

The requirement to commit on landing price saw millers opt out of imports citing that it would be difficult to get maize at that price, given the shortage of non-genetically modified maize and a weakening shilling.

A tonne of maize on the international market is going for $420 (Sh55,440) a tonne, translating to Sh5,000 for a 90 kilo bag when it lands in the country, putting traders at a crossroads over importation.

Locally a bag of maize is selling at Sh6,000, meaning that the imports will get to Nairobi at almost the same price when logistics such as handling and transport are included. Since the duty waiver took effect in February, only two ships with white maize have docked at the Port of Mombasa.

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