Commodities

Prices increase as farmers hoard 85 percent of maize

Farmer

Farmers weed a maize farm in Bondeni, Uasin Gishu County, on May 24, 2021. PHOTO | NMG

geraldandae

Summary

  • Farmers are holding onto 85 percent of the total stock of maize in the country, starving grain millers of supplies.
  • The food balance sheet report from the Ministry of Agriculture indicates that growers are holding 8.5 million bags of maize stocks out of 10.1 million bags of 90Kgs, which has left millers facing a shortage of grain, subjecting consumers to high prices of flour.
  • The report indicates that millers and traders are in possession of a paltry 1.5 million bags with the National Cereals and Produce Board (NCPB) holding zero grains.

Farmers are holding onto 85 percent of the total stock of maize in the country, starving grain millers of supplies.

The supply of maize in the market has been low since the beginning of the year as farmers hoard their crop in anticipation of higher prices.

The food balance sheet report from the Ministry of Agriculture indicates that growers are holding 8.5 million bags of maize stocks out of 10.1 million bags of 90Kgs, which has left millers facing a shortage of grain, subjecting consumers to high prices of flour.

The report indicates that millers and traders are in possession of a paltry 1.5 million bags with the National Cereals and Produce Board (NCPB) holding zero grains. NCPB has been targeting to buy two million bags of maize from farmers.

“Most of the maize and bean stock was with the farmers,” said the report.

Millers have recently complained that the flow of stocks from local farmers has been dwindling, saying that the shortage will be acutely felt in the coming days.

The processors want the government to start the process of importing the grain from outside the regions because of the prevailing shortage in the market.

“If there is a need to import, then it should be done now when there are readily available stocks in the world market,” said an official of the Cereal Millers Association.

The price of a 90-kilo bag of maize has hit a high of Sh3,700 per bag delivered in Nairobi from a low of Sh2,800 in December last year, pushing the price of a two kilogramme packet of flour to Sh125.

The recent tightening of imports coming in from Uganda and Tanzania has also disrupted the market, signaling higher prices in the coming days.

Tanzanian and Ugandan maize supplements the available stocks given that the country does not produce enough to meet the annual requirements.

The ministry says the poor regional supply from the neighbouring country and delayed short rains could make it necessary for Kenya to import maize.

The move is expected to bridge the deficit and check the high prices of the staple in the country in order to cushion consumers from exorbitant costs.

“Poor regional imports or delayed rains may warrant the government to allow the private sector to import at least four million bags of duty-free maize outside the EAC and Comesa region,” says the report.

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