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Economy

Maize earnings fears over Uganda imports

Traders spread maize to dry in Kisumu
Traders spread maize to dry in Kisumu to reduce its moisture content. Most of the produce is from Uganda. FILE PHOTO | NMG 

The government has raised the alarm over an influx of cheap maize from Uganda that look set to depress grain prices ahead of harvest.

Traders have stepped up imports from Uganda and the cross-border trade is expected to rise as maize prices in the neighbouring country dropped to Sh16 a kilogramme compared to Kenya’s average cost of Sh51.47.

While the imports will help to lower the cost of maize flour, they will hurt farmers’ earnings, setting the stage for a fresh round of confrontation between farmers and the government.

“Obviously this will affect farmers’prices because we are also expecting a bumper harvest this year. But we do not have much control over it because the East African Protocol allows for free movement of goods,” said Agriculture chief administrative secretary Andrew Tuimur.

Dr Tuimur said farmers will have to make their maize competitive by reducing cost of production and remaining competitive in the region.

The price of maize flour has dropped to a low of Sh92 on average from a high of Sh120 at the beginning of the year on lower grain costs.

This looks set to ease pressure on inflation, which rose marginally to 4.35 per cent last month, from 4.28 per cent a month earlier.

The Kenya National Bureau of Statistics (KNBS) says the cost of a kilogramme of maize has dropped from Sh65.92 in July last year to Sh51.47, a 19 per cent drop— the largest cut among the basket of commodities the bureau uses to calculate inflation.

Eastern Africa Grain Council (EAGC) executive director Gerald Masila says increased supply of maize from the neighbouring countries will help boost Kenya’s food security.

“When maize is moving freely from other countries to ours, Kenya emerges as the biggest gainer because it impacts positively on consumers,” said Mr Masila. “It is good news for consumers if the price of flour will go down because of sufficient stocks in the market,” he added.

Mr Masila predicts the supply of maize in the market to rise further to the end of the year as Uganda and Tanzania are now harvesting with Kenya’s main crop expected to hit the market starting October.

The two neighbouring countries play a major role in bridging the local deficit through cross-border trade.

Under the East African Community customs union, goods are supposed to flow freely between member states.

The cross-border maize trade saw the value of goods Kenya bought from Uganda in the first five months of the year surpass its exports to the neighbouring country.

The value of goods bought from the land-locked country was Sh30.21 billion while exports were at Sh26.08 billion, resulting in a trade deficit of Sh4.13 billion — the first ever recorded.

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