Tanzania, Uganda maize imports cool off unga prices

Maize imports from Tanzania and Uganda have helped to stabilise the market price of the grain, averting fears of a sharp increase in flour prices on supermarket shelves.

The price of a two-kilo packet of flour has averaged Sh123 since June, defying the Ministry of Agriculture’s projections that the cost would shoot to over Sh130 citing an imminent maize shortage in the country.

The ministry had repeatedly called for lifting of taxes to allow for duty-free imports, which Opposition leader Raila Odinga, the Strategic Food Reserve Fund chairman Dr Noah Wekesa and Members of Parliament from the maize growing zones opposed, saying there was enough maize in the country.

Price stabilisation

Millers attribute the current price stabilisation to improved supplies in the market.

“Prices have remained consistent over the past few weeks therefore no need for finished product price change,” said Nick Hutchinson, chief executive officer of Unga Group.

"Although supplies are not excessive, they are adequate, we believe that most grain is coming in from Uganda and Tanzania," he added.

Millers say that they are paying between Sh3,300 and Sh3,400 for a 90-kilogramme bag at the moment in Nairobi.

Agriculture principal secretary Hamadi Boga, who had supported the import of more than 10 million bags of duty-free maize, in an interview Friday said the price of flour will remain at the current levels if the flow of grain from neighbouring countries remains at the current level.

"We have witnessed a steady flow of maize coming in from the borders and this will only help to maintain the price of flour at the current cost but it will not make them cheaper," said Prof Boga.

The Ministry of Agriculture had announced in March that Kenya would run out of maize at the end of July and wanted the country to ship in grain from Mexico.

Hurt farmers

The move, however, attracted strong opposition amid fears it would hurt local farmers by forcing down prices of the commodity.

The pressure saw Agriculture Secretary Mwangi Kiunjuri change his mind on imports from Mexico, saying that maize would be procured from regional countries such as Malawi and Zambia, which have been a major source of maize to Kenya in times of shortages.

This is despite the government having made an advanced plan to import 11.1 million bags of maize Mexico.

Prof Boga says the decision to import was informed by the movement of price in the market, which had hit a high of Sh120 in April from a low of Sh85 in January before settling at Sh123 currently.

"We are a maize deficit country and we knew that imports would be the only way to lower the current cost of flour," he said.