Agriculture Cabinet Secretary Peter Munya wants millers to process the imported Mexican maize in Mombasa to cut transport costs, dampening hopes by processors that the State will waive 14 per cent import duty to make it affordable.
Mr Munya said waiving of duty to zero is a decision that can only be taken by the cabinet and that he does not foresee that happening.
Millers have imported 1.2 million bags of maize, with most of them failing to collect it citing high cost when transport cost to Nairobi is added.
“Waiving duty is a cabinet decision…the 14 per cent levy was chosen to avoid price distortion. If the maize is in Mombasa, they should consider milling it there because Mombasa is also Kenya,” said Mr Munya.
Mr Munya said the imports have helped to lower the price from above Sh3,600 to the current Sh3,300 for a 90-kilo bag as people who have been hoarding stock have been forced to release grain to the market.
Mr Munya said the country is heading towards harvest time and it might not be a good idea to waive the tax when farmers are about to harvest, as it will make the imported grain cheaper and disadvantage them.
United Grain Millers Association chairperson Ken Nyagah said that when they add transport charges, the cost of maize for a 90-kilo bag comes to Sh3,600, way higher than what they would have bought at Nairobi.
“At the moment we are struggling with stocks of flour on maize that we bought at Sh3,300 for a 90-kilogramme bag, why would we bring even expensive maize to Nairobi? Who will buy that flour?” he asked.
Treasury allowed millers to import white maize at a reduced duty for the yellow variety. The import tax on maize outside the East African Community’s common external tariff is 50 per cent.
The cost of maize flour has remained high at Sh120 for a two-kilo packet, having dropped marginally by Sh5 in May.
The processors have been struggling with slow moving flour stock in shops even after they dropped the cost from Sh130 for a two-kilogramme packet previously.