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Economy

Maize prices fall after release of emergency grains

Workers harvest maize
Workers harvest maize in Uasin Gishu. FILE PHOTO | NMG 

Maize prices have started declining following the government decision to release three million bags from the strategic food reserves to ease the grains shortage and curb rising flour prices.

Millers are now paying Sh3,000 for a 90-kilogramme bag of maize down from Sh3,400 last month with the prices expected to drop further as farmers release the stocks they have been hoarding to the market.

Farmers and traders have been withholding their stocks from the market in anticipation of higher prices, pushing flour prices to rise by more than a third to Sh121 for the two-kilo packet.

“We are paying Sh3,000 at the mill in Eldoret which is lower than where we have been,” said Unga Limited chief executive Nick Hutchinson.

A bag of maize from the strategic food reserves will retail at Sh2,300.

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The downward movement of price signals a decline in the price of maize flour, which has been steadily rising in the last one month.

A two-kilogramme packet of flour has currently hit a high of Sh121 from Sh85 in February this year with millers attributing the steep rise on a shortage of maize.

The government plans to open imports in July once the current stocks are exhausted to ensure there is a steady supply of the commodity. The Agriculture ministry has said the supplies will be exhausted in July.

The ministry said only registered large-scale millers would be allowed to import maize that will only cover the deficit.

“The large-scale millers will then be required to sell the white maize to their small-scale counterparts.

“They will only be required to ship in the deficit and not excess maize,” he said.

In 2017, the government allowed millers to import maize to curb the rising cost of flour that had hit a high of Sh153 per two-kilo packet.

However, more grain than re­quired was imported, a move that affected producers price last year.

The fresh plans for im­ports have elicited opposition from farmers lobby, which claims that the move will affect maize growers adversely.

“The government should not allow the importation of grain in the country at a time when the short rain crop will be ready for harvesting in July, this is a move to sabo­tage farmers,” said Fanuel Kru­ger, chairperson of the Cereal Millers Growers.

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