Millers are now buying maize from farmers and traders at Sh3,000 for the 90-kg bag, up from the subsidised price of Sh2,300.
They expect the cost of maize to start rising from next week as the subsidy closes in what looks set to put pressure on the costs of staple food in shop shelves.
Kenya on May 16 announced Sh6 billion subsidy on maize imports to help lower the cost of flour, which had shot up to a record high due to drought and poor planning.
Millers have started processing commercial maize as the grain subsidy comes to an end, setting the stage for flour prices to rise to above Sh110 a packet.
Millers are now buying maize from farmers and traders at Sh3,000 for the 90-kg bag, up from the subsidised price of Sh2,300.
They expect the cost of maize to start rising from next week as the subsidy closes in what looks set to put pressure on the costs of staple food in shop shelves.
Kenya on May 16 announced Sh6 billion subsidy on maize imports to help lower the cost of flour, which had shot up to a record high due to drought and poor planning.
The subsidy ends Sunday and millers reckon they will be forced to increase flour prices by at least Sh20 from the current Sh90.
“The supply from the government has been very limited and we have to mill what we are procuring from farmers and traders at a higher cost,” said a miller who requested anonymity for fear reprisals from the government.
“Obviously flour cost will go above the current subsidy price.”
This looks to put pressure on inflation, which fell to 4.73 per cent in November, from 5.72 per cent a month earlier, pushed by a fall in some food prices.
The subsidy lowered the price of a 90-kg bag of maize from above Sh4,000 with taxpayers offering importers a rebate or the difference of about Sh1,700.
