Maize flour price set to fall ‘in a week’ after tax scrap

What you need to know:

Grain from Mexico expected to arrive in the country in the next 30 days
Imports from Ethiopia to arrive within a week.
CS says maize from Ethiopia is stuck at the Moyale border as it is being subjected to Common External Tariff that imposes a 50 per cent duty on produce from outside EAC states.

The government and millers have agreed that the price of flour should come down a week after the removal of levies and importation of cheap maize from Ethiopia — and later Mexico — to Kenya duty free.

Agriculture secretary Willy Bett said the maize will land in Nairobi at Sh4,300 a bag, which is cheaper than Sh4,800 traders are currently selling to millers, pushing up the price of flour to an average of nearly Sh150 per two-kilo packet from Sh120 in January.

Mr Bett said maize from Ethiopia was stuck at the Moyale border as it was being subjected to Common External Tariff that imposes a 50 per cent duty on produce from outside East African Community member states.

“It is now clear that the price of flour has to come down in the next one week given the intervention measures that the government has put in place, which include scrapping of duty on imported maize,” said Mr Bett at the weekend.

He said grain from Mexico though is expected to arrive in the country in the next 30 days, noting that importers will have to ensure it meets the required standards for human food.

According to Bodduppali Prasanna, director at the International Maize and Wheat Improvement Centre, Mexico is self-sufficient in white maize and on average produces an excess of two million tonnes a year.

Mr Prasanna said the current price of the staple in Mexico is around Sh2,000 ($20) per 90 kilogramme bag.

Enough stocks

Cereal Millers Association chairman Nick Hutchinson said consumers should expect the price to drop once these stocks from Ethiopia and Mexico arrive.

“Once we get this maize then obviously millers will have enough stocks to mill and this will impact on the current high prices,” said Mr Hutchinson.

Treasury Cabinet Secretary Henry Rotich last week scrapped duty on imported maize for the next four months to allow importation of the produce at a cheaper price.

Kenya is among the regional countries that secured grain deal last month with Ethiopia, estimated at Sh5.5 billion, aimed at easing the current maize shortage locally.

The deal, which was facilitated by Eastern Africa Grain Council (EAGC) and USAid East Africa Trade and Investment allows Kenya traders to import maize and pulses from Ethiopia after signing 51 contracts amounting to 275,000 tonnes.