Commodities

Rising maize price signals expensive food reserve refill

ncpb-naxf

The National Cereals and Produce Board, Nakuru depot. FILE PHOTO | NMG

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Summary

  • The government insists that it will not buy maize from farmers to refill the SFR, but will instead buy it at market rates from the National Cereals and Produce Board (NCPB).
  • The State has been buying maize before through NCPB for the SFR stocks, which needs to have a minimum of three million bags for emergency use in times of famine.
  • The maize is normally released to millers at lower cost to check the rising cost of maize flour to protect consumers.

The State is staring at expensive maize when replenishing the Strategic Food Reserve (SFR) stocks as the cost of staple continues to go up amid empty stores.

The government insists that it will not buy maize from farmers to refill the SFR, but will instead buy it at market rates from the National Cereals and Produce Board (NCPB).

The State has been buying maize before through NCPB for the SFR stocks, which needs to have a minimum of three million bags for emergency use in times of famine.

The maize is normally released to millers at lower cost to check the rising cost of maize flour to protect consumers.

The Ministry of Agriculture released the entire stocks that was in SFR last year to millers after the price of flour rose to a historic high of Sh130 for a two-kilo packet.

Agriculture Principal Secretary Hamadi Boga said the government will buy SFR maize from NCPB, which is currently purchasing the grain from farmers.

“We are not in any way going to get involved in the process of buying maize from farmers, but for SFR, if we need, we shall get it commercially from NCPB,” said Prof Boga.

NCPB is buying maize at Sh2,500 for a 90-kilo bag, forcing the traders to respond with higher prices in order to get supplies from farmers.

For instance, in the North Rift, traders and millers are paying Sh2,700 for a 90-kilo bag to woo farmers who are keen on selling their produce at a higher price.

The move implies that NCPB will have a difficult time in getting supplies from farmers, making it difficult for the agency to attain a minimum of a million bags that it is targeting to buy from growers in last season’s crop that began in October.

Millers have already warned of a tight supply of maize in the market come next month, arguing that the move will see the cost of flour go up.

The price of flour has fallen this month because of high supply of maize and low demand from consumers.