Millers have rejected cheaper low-grade maize from the Strategic Food Reserves (SFRs), signalling a further rise in flour prices that have increased by a third or Sh29 in two weeks.
This came as President Uhuru Kenyatta warned millers not to take advantage of the ongoing drought to raise the price of unga.
The President said action would be taken on those hoarding maize in a directive issued after a Cabinet meeting.
Agriculture Cabinet Secretary Mwangi Kiunjuri said on Wednesday the government would release two million bags of grade three and four maize to millers in order to curb rising flour prices.
Millers who spoke to the Business Daily said they do not mill anything beyond grade two for human consumption.
The government wants to release the stocks held at the SFRs at between Sh2,500 and Sh3,000 a 90-kg bag to ease the runaway price of the staple that has now hit Sh119 for a two-kilo packet, from Sh90 on April 6. This will leave the SFRs with about two million more bags given that the State announced there were four million bags at the grain reserve.
“We do not mill anything above grade two. The only maize we process for human meal is grade one and two,” said one of the large-scale millers who requested anonymity because of the weight of the matter.
Mr Kiunjuri was expected to table his talks with the millers to the Cabinet yesterday for approval. He also told millers that the government would give them the bulk of the maize at SFRs to compensate for the Sh2.7 billion that they owe processors.
Last month, millers rejected the 1.7 million bags of maize that the government offered them as compensation for the debt that has been outstanding for the second year now.
“Millers were only interested if offered the grade one or two quality, which is not what we were offered, so we even declined to take it after seeing what was being offered,” said millers in an earlier interview.