Mexican maize at sea but millers see little price relief

What you need to know:

The consignment is expected to dock at the Mombasa port mid this month having left Mexico a fortnight ago.
Millers warn the imports will not come as a reprieve to consumers as the maize will land in Mombasa at Sh3,300 and Nairobi at Sh3,600.

Millers have started shipping in maize from Mexico with three vessels having left even as the processors project the imports will not lower the price of flour because of the costly landing price.

United Grain Millers Association chairman Ken Nyagah said the consignment is expected to dock at the Mombasa port mid this month having left Mexico a fortnight ago. However, he warns that the imports will not come as a reprieve to consumers as the maize will land in Mombasa at Sh3,300 and Nairobi at Sh3,600.

“The maize that we are importing will be expensive compared with what we have been buying locally and consumers should not expect lower cost of flour because of this expensive maize,” said Mr Nyaga.

Millers are grappling with a shortage of maize in the market with a 90-kilogramme bag selling at Sh3,300 in Nairobi.

The price had dropped to Sh3,000 when the government opened imports in April but picked up again after millers rejected import plans, saying the window was short, forcing the Treasury to come up with another gazette notice giving processors two months to conduct the shipments.

Despite the high cost of the produce, millers have been forced to reduce the price of flour to attract buyers following low demand occasioned by a diminishing purchasing power due to Covid-19, which has seen employees laid off or salaries cut.

The government has allowed millers to import two million bags of white maize at a 14 per cent duty and an additional two million bags of yellow maize at 10 percent.

Mr Nyagah, whose organisation covers 60 percent of the market share, said the government should consider waving duty if they want consumers to benefit.

“The only way consumers can enjoy cheap flour is by having the government remove the 14 percent duty on imports,” he said.

Maize from outside of the common market region attracts a 50 percent duty on imports across the East African Community.

The imports are expected to cover the month of July when the current stocks are expected to have been exhausted.