Commodities

Higher flour prices loom as millers snub maize imports

flour

Workers arrange maize flour packets at a supermarket in Nairobi. FILE PHOTO | NMG

geraldandae

Summary

  • Processors argue that currently they can only get good stocks of non-Genetically Modified Organism (GMO) maize in Mexico and it will take at least 45 days for the first consignment to arrive.
  • The government last week waved 50 percent duty levied on maize outside the East African region and allowed millers and traders to ship in 540,000 tonnes in order to check the current high prices of flour.

Millers have snubbed maize imports on the back of high landing cost for the produce and a shorter window provided for shipping the commodity, a move that will likely subject consumers to higher cost of flour.

Processors argue that currently they can only get good stocks of non-Genetically Modified Organism (GMO) maize in Mexico and it will take at least 45 days for the first consignment to arrive after orders have been placed.

The government last week waved 50 percent duty levied on maize outside the East African region and allowed millers and traders to ship in 540,000 tonnes in order to check the current high prices of flour.

“We have the challenges that make it nearly unfeasible to import maize in the window provided. Three months is a short time to bring in any substantial quantities,” said Rajan Shah, chief executive officer Capwell Industries.

Mr Shah said the international price of maize also makes the landing cost so high that millers would find it difficult to justify affordability, hence defeating the purpose of importing at this time.

Ken Nyagah, the chairperson of the United Grain Millers Association- an umbrella body that controls 80 percent of the flour market, has also said that the imports will not address the current cost of flour due to high cost of the produce.

“A 90 kilo bag is landing in Kenya at Sh6,000, locally the same quantity is going for Sh4,700. This means that the imports will have no effect on high prices of flour,” said Mr Nyagah.

Mr Nyagah also raised concern over the involvement of traders in importation as it will see some of the unscrupulous individuals ship in more than is required for hoarding purposes.

At the moment there is a shortage of supply to Kenya from the regional markets as most stocks from Uganda are heading to South Sudan where they are fetching a good price.

The two countries normally help in bridging Kenya’s annual deficit through cross-border imports.

The price of flour has hit a high of Sh150 from a low of Sh125 in April on the back of costly maize and limited supply in the market.

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