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Commodities

Cost of maize flour up 28pc on short supply

A shopper picks maize flour at a store.
A shopper picks maize flour at a store. FILE PHOTO | NMG 

Maize flour prices have risen sharply by up to 28 percent as millers reported poor supply by farmers, raising fears of a negative impact on the overall cost of living.

A spot check at several supermarkets in Nairobi showed found the price of a two-kilo packet of maize had by Monday increased to a high of Sh109 from an average Sh85 since February.

At Tuskys Supermarket, a two-kilo pack of Soko brand was retailing at Sh109, while Kifaru and Jogoo went for Sh104 and Sh101 respectively.

“There has been scarcity in supply of maize in the market and we are hardly getting stocks from farmers even with increased purchase price of Sh2,700 for a 90 kilo bag,” Rajan Shah, chief executive of miller, Capwell Industries, said.

“The increase in cost of maize has already sparked the rise in price of flour as millers have to pass increased cost to consumers,” he added.

Climb higher

Already, the ex-factory price of a bale of maize flour has shot up to Sh1,110 from Sh980 previously with millers warning that the prices would climb further as scarcity persists.

Andrew Tuimur, chief administrative secretary at the Agriculture ministry, blamed hoarding for the rise in maize prices.

“Farmers seem to be hoarding their maize and there is very little that is coming to the market. This explains why the price of the commodity is now going up,” he claimed.

He said the National Cereals and Produce Board (NCBP) has been struggling to raise sufficient stocks of maize for the Strategic Food Reserve (SFR) since February when it kicked-off purchases from farmers.

Supply hitch

Official data showed that the NCPB had so far only purchased 20 percent of the required two million bags to stock the reservoir.

Dr Tuimur said the board had bought 418,000 90kg bags by Monday, signalling a hitch in supplies.

The fresh increase in maize prices in expected to pile pressure on the country’s inflation levels, especially at a time when the weatherman has warned that the start of the traditional March-April-May long-rain season would delay and that rainfall would be poorly distributed.

This is expected to impact on agriculture and trigger increases in the prices of several commodities on lower output.

Several counties, including Mandera, West Pokot, Kilifi, Laikipia, Nyeri, Garissa, Turkana, Marsabit, Samburu, Tana River, Isiolo, Kitui and Wajir, are already in the grip of drought and it will take time before the food situation improved.

The country’s inflation rose to 4.35 percent year-on-year in March from 4.14 percent a month earlier, with the Kenya National Bureau of Statistics (KNBS) attributing it to rising food prices. On a month-on-month basis, inflation was 1.60 percent.

The food and non-alcoholic index rose 3.30 percent month-on-month, the statistics office said.

The government last month announced that there were 46 million bags of maize in the country held by agencies such as humanitarian and relief bodies, the NCPB, millers and farmers.

Highest harvest

The country realised 40 million bags of maize last year, the highest harvest in the last three years.

The NCPB has capped the purchase of maize at 400 bags per farmer as the government moves to tame traders and large-scale farmers who have been accused of abusing the window at the expense of small-scale growers.

According to the government, any registered farmer with more than 400 bags of the produce must be cleared by county agriculture officials before they are allowed to sell.

Uasin Gishu County got the lion’s share in maize purchases under the NCPB quota system, with an allocation of 36 percent of the two million bags to be bought by government.

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