Why cost of ugali may not drop drastically
Workers spread dry maize by the roadside after offloading it from a truck in Elburgon, Nakuru County, on June 6, 2023.
Consumers may continue to pay more for maize flour despite the influx of maize from Uganda and Tanzania, and early harvesting in parts of Western Kenya.
However, the cost of flour could remain above Sh200 per two-kilogramme packet as millers want to exhaust stocks of ‘old’ maize before reviewing prices to guard against losses.
“Our members need to clear the existing stocks and sell the produce at the current prices so that they can break even before the prices are reviewed downwards, even though more maize is coming into the country from EAC member states,” Mr Ken Nyagah, the chairman of the United Grain Millers Association, told the ‘Nation’.
He said maize from Tanzania lands at Sh5,700 per 90-kilogramme bag while that from Uganda is expected to land at Sh5,400. This should lead to marginal changes in unga prices.
Already, farmers in Uganda have started harvesting and selling their produce at lower prices — between Sh4,500 and Sh5,500.
According to Mr Anthony Wambugu, the national chairman of the Agro Processors Association of Kenya (APAK), millers will take advantage and import the produce in abundance.
Mr Wambugu, however, clarified that prices may not fall by a large margin due to the high electricity costs.
“If all goes well, we will reduce prices by about Sh10-20 per pack. The prices would have come down further but the cost of buying power is still high,” he told the ‘Nation’ after attending a maize flour blending seminar organised by the Agriculture ministry in Naivasha.
To grind a 90kg bag of maize, he noted, a miller needs three units of electricity. He also noted that the price of manila paper for packaging has shot up in the past week.
Packaging paper
“Packaging flour is another problem. For the past week, the cost of packaging paper has gone up and if you spread all these costs along the value chain, it will be very difficult for millers to reduce it by a larger margin,” he added.
Nonetheless, millers have asked the government to extend the import window and allow them to import more than one million bags before Kenyan farmers start harvesting their produce.
Ms Veronicah Wambui, a grain trader who imports maize from neighbouring countries, said prices have dropped.
“A 90kg bag sells for Sh4,900 in Uganda and we expect it to come down to Sh4,000 or less. This is because our farmers in the western part of the country have also started harvesting,” she said.
For the past six months, millers have been given a window to import but they have only received one consignment of 250,000 bags against a total of 300 millers (both small, medium and large).
Acute shortage
According to the APAK chairman, only five millers were able to secure the consignment.
“The government should support the private sector and give them this window to secure at least one million bags of maize from neighbouring countries,” he said.
Maize prices had hit Sh6,200 in the local market due to an acute shortage.
“We expect unga prices to eventually fall in the next few months following the arrival of maize from Tanzania and Uganda, which will stabilise supply in the market,” Mr Nyagah added.
Maize farmers in the North Rift, the country’s food basket, are expected to harvest in the next three months, with the Ministry of Agriculture promising a bumper crop due to favourable climatic conditions and the distribution of subsidised fertiliser.
According to Agriculture Principal Secretary Kello Harsama, the harvest is expected to be between 35 and 40 million bags of maize.
While Tanzanian maize has started arriving in the country following the resolution of licensing issues, Ugandan maize is expected to start arriving next month and should help bring down costs.
Some millers are, however, reluctant to buy maize from Uganda because of aflatoxin fears.
“As much as we appreciate the arrival of maize from countries like Uganda to bring down prices, we need to test for aflatoxin to ensure it is at acceptable levels," said Mr David Maina, a miller in Eldoret town.
