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Economy

Duty-free maize imports window to open in July

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

Kenya is set to open duty free maize imports from July to plug the grain shortage that has seen the price of flour rise 30 percent in one month.

Agriculture Cabinet Secretary Mwangi Kiunjuri told millers in a closed-door meeting that strategies are in place, including waving of a 50 percent duty imposed on imported grain from outside East Africa Community (EAC) region, to avoid last minute rush.

Mr Kiunjuri, who met with both millers and animal feed manufacturers, said the importation of both yellow and white maize will be opened once the current stocks are exhausted.

“We are watching the situation closely to ensure that proper mechanism for importation are put in place to avoid being caught unawares in the last minute,” Mr Kiunjuri said, adding only registered large scale millers will be allowed to import maize.

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 Sh3,400 from Sh2,300 in February 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 from 4.35 percent in March to 6.58 percent last month — the highest level in 17 months.

In 2017, the 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.

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

During the meeting, it was agreed that at least three million bags of maize will be released to millers from the Strategic Food Reserve (SFR) at Sh2,300 each to curb the rising cost of flour.

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