The price of maize flour could go up by Sh2 for a two kilogramme packet in the coming days on the back of a shortage and costly maize in the market, coupled with a recently introduced cess on grains delivered to Nairobi.
Unga Limited chief executive officer Joseph Choge said cess alone could see the cost of flour go up by Sh2 once the cost is factored in the pricing.
Kenya Revenue Authority (KRA) announced last week that it had started charging the levy effective March 11 on deliveries made in Nairobi where all the large-scale millers are based with a few branches in other cities.
“Cess will definitely affect new stocks that we are buying and prices will increase,” Mr Choge said.
He added that the company had not yet increased prices, noting that this will be done for new supplies coming to Nairobi.
Speaking on Wednesday during the millers annual conference in Nairobi, chairman of the United Grain Millers Association Ken Nyagah said they were hardly getting grain from farmers as supply of the grain tightens in the market.
“We will be forced to increase the prices of flour as projections show the current stocks of maize that we have will last for two months,” said Mr Nyagah, whose organisation accounts for 60 percent of the flour market in the country
Popular brands such as Dola, Pembe, Ajab, Jogoo and Soko are now trading at Sh133, Sh124, Sh127, Sh122 and Sh123 respectively for a two-kilo packet at major retail outlets from an average of Sh108 in December.
Mr Nyaga urged the government to start putting in place a strategy for imports of maize from Mexico as currently there are not enough stocks within the region, in order to cushion consumers from high prices.
Millers say they had been receiving good stocks of maize from Tanzania in February but the volumes have been dwindling while most stocks from Uganda are heading to South Sudan where they fetch a good price due to scarcity.
“If there is a decision on imports that should be made by the government, then it should happen now because of the shortage that is expected globally in the coming months,” Mr Nyagah said.