Kenya wants share of maize imports from region raised

Kenyan grain traders seeking to import maize from Tanzania will now be required to register their companies in Dar es Salaam. FILE PHOTO | NMG

Kenya is seeking to limit Zambia, Tanzania and Uganda from exporting maize to other countries at its expense in fresh efforts to curb the surge in maize flour prices, ease inflation and the squeeze on household budgets.

Agriculture Cabinet Secretary Peter Munya says the country has opened talks with the three countries to guarantee Kenya a share of the maize export to plug the shortfall in supplies.

Crop failure due to poor weather and a shift in the movement of Uganda maize to South Sudan have seen flour prices rocket to a record high of Sh210 for a two-kilo packet, up from Sh120 at the start of the year.

This has triggered a rally in inflation to a 58-month high of 7.9 percent and forced families to skip meals and cut orders for other items like airtime and beer.

Now, Kenya is seeking a solution from neighbouring countries to boost supply ahead of the harvest season that starts in October.

“We are now talking to these countries to have them set aside some stocks of maize to be purchased by our traders to boost supply locally,” said Mr Munya.

Zambia has started harvesting its main crop while Tanzania and Uganda have surpluses that Kenya is seeking to tap.

Kenya traditionally receives imports from Uganda and Tanzania, but trade flows in the grain have shifted to other countries.

The bulk of Ugandan maize is now heading to South Sudan, encouraged by higher prices in the country relative to Kenya where a 90-kilo bag is selling at Sh7,000 from Sh2,800 in January.

Kenya’s inflation hit a 58-month high in June on soaring food prices, breaching the government’s upper limit ceiling for the first time in nearly five years.

The Kenya National Bureau of Statistics says changes in the cost of living climbed to 7.9 percent from 7.1 percent in May.

Countries in the region are competing for a limited white maize stock for both human consumption and manufacturing of animal feeds following disruption in the supply of the grain from Ukraine and Russia in the wake of the ongoing war between these two countries.

Mr Munya also said the government would intervene on logistical challenges faced by business people in shipping in the produce, which has seen the cost of transport more than double.

A 90-kilo bag of maize is selling at around Sh3,000 in Zambia but it gets to Kenya at Sh6,000 because of the high cost of transport and other levies involved in shipment.

Transporters are charging Sh1,500 for a single bag of maize from either Malawi or Zambia from Sh600 previously, pushing the landing cost of a 90-kilo bag to Sh6,000 when it gets to Nairobi.

The announcement comes just days after millers asked the State to open direct government talks with the regional countries to have them set aside some stocks of maize for Kenya.

The Tanzanian government last month doubled the cost of export permit by 93 percent. The authorities increased the cost of acquiring the licence from Sh27,000 per truck previously to Sh52,000 currently, according to border officials.

The Treasury opened the import window in May to allow millers to bring in maize from outside of Africa duty-free. However, the processors said they could not ship in the commodity because of scarcity and high prices in the international market.

The government was banking on imports from outside of Africa to curb the soaring cost of flour, which has been steadily rising since April this year.

The sky-high inflation on the back of a jump in the price of essential items such as cooking oil, food, fuel and soap is squeezing household budgets and demand for goods and services.

This has forced many households, especially in the low-income segment, to reduce their shopping basket in an environment where firms have frozen salaries as they recover from Covid-19 economic hardships.

The rise in the cost of essential commodities has forced workers to cut back spending on non-essential items such as beer and airtime, ultimately hurting firms like East Africa Breweries Limited (EABL) and Safaricom.

Costly commodities have hit workers hard given that the average real wages, adjusted for inflation, stood at negative 3.83 percent last year compared to negative 0.59 percent in 2020.

Employers say the real wages will take longer to improve amid the recovery of the economy from Covid-19 economic hardships, which delivered layoffs, pay cuts and business closures.

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