Business

State urged to fast-track importation of duty-free maize

Thursday, May 26th, 2022 11:30 | By
Maize warehouse. Photo/PD/Library

Manufacturers and players in the cereals sector have petitioned the government to act immediately to avert maize and wheat shortage, which if left unchecked, could worsen the already dire food crisis in Kenya.

They also asked that Kenya to negotiates with the governments of Zambia and Tanzania to allow the importation of six million bags of maize and also ease transportation logistics for faster delivery.

“This is because the high cost of transporting produce from the neighbouring countries will ultimately drive up the price of finished products,” the stakeholders said in a joint statement. Kenya Association of Manufacturers, Cereal Millers Association, Association of Kenya Feed Manufacturers, Eastern Africa Grain Council and United Grain Millers Association signed the statement which warns that the shortage will further fan inflation due to price surges.

Freight charges

Transportation costs from Lusaka to Nairobi have increased from $120 (Sh13,992) to $185 (Sh21,571) per tonne, escalating the price of imported maize. Freight charges have also soared to historic levels in the wake of Ukraine tension. The government had earlier stated that it was planning to import maize outside East African Community (EAC) countries to prevent maize flour from further spiking beyond the current Sh155 per 2kg packet.

Kenya’s maize production is estimated at 3.2 million tonnes per year against the consumption of 3.8 million tonnes, a roughly 16 per cent deficit that was previously being offset by Tanzania and Uganda.

The sector stakeholders also want the immediate formation of a committee to expedite a solution to the ongoing food crisis.

Kenyan farmers, who have been holding the produce over low prices by the National Cereals and Produce Board, are also encouraged to release maize stocks to millers at prevailing prices.  The cereals body had in last December increased the price of maize to Sh3,000 from Sh2,700 per 90kg bag but maize growers still kept off in anticipation of further hikes.

Persistent drought

The prices have now hit Sh4500 for the same quantity, about 40 per cent increase compared to December 2021, mainly due to persistent drought and reducing maize inflows from EAC cross border trade. Wheat prices rose from Sh3,800 in April 2021 to Sh6,000 per 90kg bag in 2022.                         – Herald Aloo

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