Counties’ tax on maize transport raises flour price

Inter-county trade barriers are dampening the hopes for cheap flour as numerous levies are passed on to consumers, millers have said.

They said counties are charging Sh64 for every bag of maize passing through their jurisdiction, piling pressure on the price of the staple.

More than 90 per cent of maize processed in Nairobi is ferried from Rift Valley and millers have to pay cess in several counties.

“These inter-county trade barriers are undermining the efforts of keeping the cost of flour low because they add up to overall cost of the finished product,” said Cereal Millers Association.

Other charges levied by counties include distribution and branding permits which millers have to pay whenever they go to counties other than the ones they are based in.

Last week, 10 trucks belonging to different millers were intercepted by county officials in Nakuru County for failing to pay the required levies.

Mombasa-based millers are the hardest hit as maize pass through many counties before getting to the port city for milling.

Millers said they are working with the Kenya Association of Manufacturers and counties to eliminate the barriers.   

READ: Millers say they have exhausted stocks of subsidised maize

Flour prices have started stabilising with retailers now selling a two-kilo packet at between Sh105 and Sh113, which complies with a government directive. A spot check indicates most brands are retailing at the same price as in the last two weeks.

“The prices have now settled at the current levels and we do not expect them to go up further than that,” said the millers.

Millers noted that the prevailing prices are a true reflection of the actual cost of production and that no processor is taking advantage of the lack of subsidy to charge exorbitantly.

Processors have since January 1 been milling stocks from traders and farmers, pushing the cost of a bale of flour in the factory to Sh1,230 from Sh1,010.