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Economy

State to release 2m bags of maize from strategic reserves

Agriculture Cabinet Secretary Mwangi Kiunjuri
Agriculture Cabinet Secretary Mwangi Kiunjuri. FILE PHOTO | NMG 

The government will release two million bags of maize to millers from the strategic reserves in a deal aimed at curbing flour prices that has in the past two weeks increased by a third or Sh27.

Agriculture Cabinet Secretary Mwangi Kiunjuri said the two million bags will be available to the processors at between Sh2,500 and Sh3,000.

The government’s move is aimed at curbing the rise in flour prices, which has seen the cost of a two-kilo packet of Jogoo increase from Sh90 on April 6 to the current Sh117 following a grains shortage.

Millers have warned that the cost of the staple will rise beyond the peak Sh135 a packet recorded in 2017, which forced the State to offer subsidies to maize importers to help lower the cost of flour.

The price of a bag of maize has gone up to Sh3, 200 from Sh2,700 at the start of the year and is forecast to breach the Sh5, 000 mark this year without State intervention.

This will put pressure on household budgets and jerk inflation, which rose to 4.35 last month from 4.14 per cent in February. In 2017, subsidy programme lowered the price of a 90 kilogramme bag of maize to Sh2,300 from above Sh4,000, forcing the State to control the two kilogramme packet of flour at Sh90.

The government has cited hoarding of maize for the price jump, arguing that the country has enough grains after a bumper harvest last year.

“There is enough maize in the country at the moment that can last up to July, we are aware of the events surrounding flour prices but we shall be issuing a comprehensive statement on that soon,” Mr Kiunjuri said last week.

Maize harvest hit 40.9 million bags last year, reflecting a 20 percent rise that was expected to deliver cheaper flour.

Farmers fear releasing maize to the market following forecast of failed rains this year, worsening the ongoing food shortages and water scarcity.

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