Why consumers will wait longer for cheaper unga
Kenyans will have to wait longer before the cost of maize corrects itself amid dwindling stocks in the region which is expected to further affect purchasing power.
East African Grain Council (EAGC) Executive director Gerald Masila said the 2021/2022 crop year recorded a poor harvest while most of the crop was consumed while green as the appetite for roasted and boiled maize surged.
Further, according to Masila even ongoing harvesting in parts of North and Central Rift regions will not yield much as farmers reduced farming acreage due to a lack of fertiliser and the effects of climate change.
Normal harvest
“Even with the expected harvest our estimation is that we might be at 60 per cent of a good normal harvest but still face a deficit in the coming year which could go as high as 35 per cent”, he said during a stakeholder validation forum organised by the Warehouse receipt system Council (WRSC) at a Nairobi hotel.
Currently, farmers are selling a 90 kg bag of maize between Sh4,000 and Sh5,500 unlike last year when the same quantity was retailing at below Sh3,000. A few months ago, 90kg bag of maize prices skyrocketed to a high of over Sh6,000 prompting the government to sanction the importation of 540,000 tonnes of non-GMO maize.
And later about three weeks before the August 2022 General elections it announced a Sh8 billion maize flour subsidy.
Compared to Sh220 in July this year, Unga prices currently averages between Sh180 and Sh190 for a 2-kg packet which is still a great challenge to the majority of Kenyans as the cost of living is yet to ease even after the new government promised to intervene. Before the government announced Unga subsidy in July, 1kg maize flour had increased by between 30 and 65 per cent in 2022. Following the effects of the drought, the Ministry of Agriculture says that Kenya according to the 2022 global hunger index is ranked 94 out of 121 countries. Every year, 13 million bags of maize are lost due to the effects of stem borer and fall armyworm attacks.
President William Ruto recently said that the country needs a year to lower the price of maize flour and promised to empower farmers to affordably produce maize.
Masila added that the current maize on sale in the market is not dry enough to the recommended 13.5 per cent moisture content which millers say is affecting cost of production upward. The director explained that the prevailing deficit follows high consumption of the maize while still green just before the drought kicked off unlike before when the farmers could grow and dry over 95 per cent.
“Consumption of the green maize means that the final crop will be much lower than normal harvest”, he said adding that: “Even in our best year during a bumper harvest Kenya still is not able to meet consumption requirements as it has to rely on imports from Uganda, Tanzania, Malawi and Zambia.”
Early this year farmers failed to access adequate fertiliser and price of the then available stocks were too high reaching to over Sh6,000 for a 50kg bag before the new government intervened to announce a subsidised manure of Sh3,500 in September. The high cost prompted farmers to use low quantities when applying to crops while a good number of growers reduced their acreage under maize farming.
Crop calendar
This is over and above the fall army worm that attacked the crops leading to farmers spending much to buy chemicals.
The regional crop calendar outlook, Masila said is equally grappling with low food production owing to the effects of the ongoing drought and high consumption.
Regional suppliers -Uganda and Tanzania which ordinarily contribute to bridging the deficit in Kenya are instead exporting the quantities to alternative markets such as DRC, South Sudan and Arab countries that are paying premium prices.
“We are now faced with stiff competition of dwindling stocks from regional players, for example, Tanzania has new markets including export destinations in the Arab countries that are buying the commodity at competitive prices for animal feed production. This is a red flag that as we also depend on the region to bridge the deficit gap, we still must focus inward on how we can increase our production,” Masila added.
According to the Ministry of Agriculture, maize production projection is expected to drop to 33 million bags this year compared to 44.6 million bags in 2018.
Masila noted that with the GM ban now lifted, the country can access more grains from other segments of world markets and thus help in reducing deficit.
“We are recommending the National and County Government to get data estimates of the quantity of maize we should be getting out of the farmers by the end of December. This will help in making a decision of even sourcing for alternative supplies for raw materials for feed to reduce the competition for white maize for human consumption and animal feed manufacture and this in turn bring down the prices for the consumers”, Masila said.
The WRSC, Jane Ngige acknowledged that although the last two seasons has not seen the country utilize much on the receipt system, they are hoping that come this harvesting season farmers will be able to store their maize at the stores using the system.
