Pain as cost of ugali on the rise
Ugali. Maize flour prices have more than doubled in the North Rift region.
The cost of ugali is likely to shoot up after millers hiked flour prices due to a biting shortage of maize in the local and regional markets.
Coming at a time more than three million Kenyans are staring at starvation due to drought and declined crop and livestock production across the country, the looming increase in the cost of putting ugali on the table is likely to hit households hard.
Maize flour prices have more than doubled in the North Rift region, the country’s food basket, with a two-kilogram packet going for Sh200, up from Sh85 barely two months ago.
The millers fear the price of maize flour may continue its upward trend as the supply of the stable deteriorates.
“Consumers should brace themselves for higher prices of unga as we face more difficulties sourcing maize to sustain our milling operations,” said Grain Belt Millers Association (GBMA) chairperson Kipngetich Mutai.
A 90kg bag of maize is now going for Sh5,200, up from Sh4,500 two weeks ago.
The millers said they were facing challenges importing the grains from Tanzania due to tough conditions set by the East Africa Community (EAC) member state.
Also read: Reject new taxes on flour, MPs told
“Although there is some maize in Tanzania, the stringent conditions for obtaining an export licence – popularly known as Kibali – are making it hard for our members to import the grains into the country,” added Mr Mutai.
He said 400 lorries loaded with maize were stuck at the Namanga border due to slow clearance procedures.
“The importers are required to produce an export licence to facilitate entry of the grains to the country,” explained Mr Mutai.
The millers want the government to negotiate with Zambian and Tanzanian authorities to facilitate importation of six million bags of maize to plug the current shortage and lower flour prices, which have hit Sh165, up from an average of Sh130 per two-kilogram packet across the country.
“It is also critical for the government to support transport and logistics for the importation of maize from these countries. The high cost of transporting produce from neighbouring countries ultimately drives up the price of finished products,” added the millers in their petition.
The millers explained that it costs Sh185,000 to transport a tonne of the grains from Lusaka, Zambia, into Kenya, up from Sh120,000, adding that sea freight costs had worsened due to the aftershocks of the Covid-19 pandemic and the Russia-Ukraine conflict.
A 90-kilogram bag of maize from Tanzania is selling at Sh5,000 while that from Zambia and Malawi lands at Sh5,200, which the millers have termed too expensive.
“Consumers are already struggling due to the rising commodity prices. Implementation of these recommendations will be crucial in mitigating rising costs of wheat and maize-based commodities should the situation persist,” said the millers.
The petition has been endorsed by the Kenya Association of Manufacturers (KAM), Cereal Millers Association (CMA), Association of Kenya Feed Manufacturers (Akefema), Eastern Africa Grain Council (EAGC), Agro-Processors Association of Kenya (APAK), Grain Belt Millers and Farmers Association (GBMFA), Agriculture Sector Network (ASNET) and United Grain Millers Association (UGMA).
Maize production in Kenya is estimated at 3.2 million metric tons annually, against a consumption rate of 3.8 million metric tons.
The deficit is bridged through imports from EAC member states. Kenya produces approximately 100,000 metric tonnes of wheat, against an annual demand of 2.4 million metric tons. This means the country relies heavily on imported wheat, which is estimated at -96% of the produce.
“Kenya imports 60 per cent of the deficit mainly from Ukraine and Russia. The current situation in the two countries has disrupted the importation supply chain. As a result, players in the sector have turned to the expensive wheat from USA, Argentina, Australia and Canada. This has been aggravated by the total ban on imports from India by the Kenyan government,” explained the millers.
The National Cereals and Produce Board (NCPB) has exhausted its emergency maize stocks.
The agency sold the more than 300,000 bags it purchased last season on commercial basis to millers.
“We have sold out all our maize stocks and the acute shortage of the grains has to be handled at high government policy level,” said NCPB Managing Director Joseph Kimote.
The board sought Sh10.3 billion for emergency food stocks in the last financial year but faced stiff competition from millers and traders, who offered better prices and prompt payment.
The board was to purchase three million bags of maize at Sh7.56 billion and 50,000 bags of beans at Sh405 million to stock its National Food Reserve.
According to NCPB Chairman Mutea Iringo, the board was to buy 30,000 bags of green grams at Sh270 million and 20,000 bags of 25kg powdered milk at Sh340 million, but it failed to achieve the target due to stiff competition from millers and traders.
