Millers cut maize buying as Treasury delays Sh4bn pay

Low demand for maize from millers due to financial constraints has pushed down the buying price of the commodity, which has, in turn, led to a decline in consumer prices of flour.

Millers have reduced significantly on maize purchases because of financial difficulties resulting from Sh4 billion that the government owes them, pushing the price of a 90-kilogramme bag of maize to between Sh2,000 and Sh2,300 from a high of Sh3,000 last month.

As a result, the price of maize flour has dropped to below Sh105 from Sh115 on average in January and Sh110 last month.

“Millers have cut down on purchases and this has reduced the demand of grain leading to low prices for the produce,” said Cereal Millers Association (CMA), adding that most processors are now milling what they had stocked.

The supply of grain has increased following high volumes of cross-border imports from Uganda and Tanzania in the recent days, supplementing the local crop.

Millers normally process more than three million bags of maize every month but the processors say these volumes have dropped with some of them halting purchases.

READ: Millers, transporters owed Sh7.6bn in food subsidy scheme

Agriculture chief administrative secretary Andrew Tuimur said last week the money has been factored in the supplementary budget and millers would be paid once it has been approved by the Parliament.

The Sh6 billion subsidy programme started last year in May to tame the rising cost of flour that had hit a high of Sh153 per two-kilogramme packet.

Initially, the scheme was to end in September but the government extended it to December.

The millers say the government did not pay them after the programme was extended on the money that they used to import maize.

Millers say the country is currently enjoying a relatively lower cost of flour because of the cross-border imports from Uganda and Tanzania.