The grain is being sold in 24-kilogramme bags at Sh1,300 by traders.
Each 24-kg bag contains 12 pieces of the smaller subsidised packets.
Traders are deliberately denying residents access to cheaper maize as authorised by the government.
Subsidised maize has returned to shops in Migori town, but this time in 24-kilogramme bags that some local wholesalers had deliberately denied residents access to.
The bags, which contain 12 pieces of the smaller 2-kilogramme packets, are being sold at Sh1,300 by the traders.
This is despite the commodity being mostly unavailable before even with a national government directive that the staple be obtainable by consumers.
"We normally repackage them at night and our bosses caution us against discussing this matter with anybody," said a wholesale worker who asked not to be named for this story.
Subsidised maize was going for Sh90 per 2-kg packet. Currently in Migori town, the hoarded repackaged flour is retailing at Sh120.
This represents a price rise of a third in this month, coming after the end of a four-month import subsidy and the government setting the price at which it will buy grain from farmers.
"No wonder we had a permanent shortage of this cheap maize in the shops. This is fraud," said a consumer, Ms Loice Otieno.
Separately, millers say the cost of buying the grain is set to average Sh3,400 per 90-kg bag, which will force them to increase maize flour prices by Sh30 from the current Sh90 in the town.
“Obviously the cost will go above the current subsidy price to sell at an average Sh120 for a two-kilogramme packet. Our buying price will obviously be above what the government is buying at to attract stocks from farmers,” said a miller who requested anonymity for fear reprisal from the government.
The move will likely put pressure on inflation, which fell to 7.06 per cent in September, from 8.04 per cent a month earlier, pushed by a fall in some food prices after State intervention.
The staple has a major effect on the cost of living index where food accounts for the largest share (36.04 per cent) of the goods used to calculate inflation.
Kenya in May last year announced Sh6 billion subsidy on maize imports to help lower the cost of maize flour which had shot up due to drought and poor planning.
The subsidy helped lower the price of a 90-kg bag of maize to Sh2,300 from above Sh4,000, with taxpayers offering importers a rebate or the difference of about Sh1,700.
This kept the cost of the two-kg packet of flour at Sh90 from a high of Sh153 in April last year.
