Traders, desperate for stocks held by farmers, are now offering Sh2,000 per bag at the farmgate — an improvement from the initial Sh1,800 offer.
However, the rising cost of maize, which forms up to 80 per cent of the cost of production, would impact on the flour price.
Farmgate prices of maize have jumped 11.11 per cent to Sh2,000 per 90-kilogramme bag over the last two weeks, market data shows, signalling a potential rally in the cost of flour.
Data shows that traders, desperate for stocks held by farmers, are now offering Sh2,000 per bag at the farmgate — an improvement from the initial Sh1,800 offer that the growers had rejected, terming it too low.
The new offer of Sh2,000 is, however, still lower than the recommended price of Sh3,200 that President Uhuru Kenyatta directed the Ministry of Agriculture to enforce.
“We have had no option but to increase the price to get some stocks from farmers,” said a trader who sought anonymity.
The cost of flour has dropped by a huge margin for the first time in nearly two years as it responds to lower maize price in the market coupled with weak demand.
A two-kilogramme packet of major brands in retail chains has dropped to Sh103 for Soko, Sh110 for Jogoo with Pembe retailing at Sh108. These brands have been selling at above Sh115 as late as last month.
However, the rising cost of maize, which forms up to 80 per cent of the cost of production, would impact on the flour price.
Millers said they are getting maize in Nairobi at Sh2,600 for a 90-kilo bag from traders. This is a decline from Sh3,800 that the same quantity was trading at between March and September this year.
The government stopped purchasing maize from farmers last year.
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