Cost of maize in Kenya all-time high as imports dry up

24.03.2017

Kenya's dry maize prices have hit a record high of 44 U.S. dollars per 90kg bag as cross-border imports from Uganda and Tanzania nearly dry up.

The last time prices were at nearly such a level was over 10 years ago when East Africa's biggest economy suffered a dry spell, as it is happening now.

But besides the dry spell and low imports, the current price surge has been blamed on farmers and traders hoarding stocks they have in search of higher prices.

The cost of the produce, data from wholesale markets showed Wednesday, is the highest in lakeside city of Kisumu, where a 90kg bag is going for 44 dollars.

In the capital Nairobi, a 90kg bag of the produce is retailing at 40 dollars while in the coastal city of Mombasa 42 dollars.

Prices are lowest in the breadbasket districts of Nakuru and Eldoret where the grain is retailing at between 35 dollars and 38 dollars.

On the other hand, retailers are selling a 2kg tin of dry maize at between 1.1 dollars and 1.2 dollars in various parts of the country, an increase from less than a dollar at the beginning of the year.

The swelling cost of dry maize has consequently pushed up the price of maize flour, which has risen to a record 1.3 dollars for a 2kg packet, the highest level in the history of the product.

As the prices rise, cross-border imports which the east African nation heavily relies on to supplement its about 40 million bags production, have dwindled.

Data from East African Grain Council on Wednesday indicated that as low as 2 metric tonnes of the produced are imported into Kenya at various border-points that include Malaba, Lwakhakha and Busia, on the Ugandan side and Isebania and Namanga on the Tanzanian side.

Last year, the Ministry of Agriculture had projected that maize imports from Uganda and Tanzania will hit at least 20 million bags.

Uganda is said to have suffered declined production last year, thus, such a feat would not be realized this year to stabilize prices in Kenya.

The high prices have pushed the east African nation's consumers between a rock and a hard place because maize is a staple.

The cereal is consumed by millions of Kenyans, with citizens gobbling up to 4 million bags each month, according to the Ministry of Agriculture.

"For the first time in my life, I have stopped consuming ugali (corn meal) every day. I am now supplementing it with potatoes," Risper Anjeche, who works with a non-governmental organization in Nairobi said Wednesday. "Life is becoming unbearable that having a family of four like mine is a big burden."

Kenya's inflation rose to a four-year high of 9.04 percent in February from 6.99 percent in January, pushed up by fast-rising food and fuel prices, according to the Kenya National Bureau of Statistics.

Food situation, according to Cytonn, a Nairobi-based investment firm, has deteriorated pushing up inflation as the food component of the Consumer Price Index, which carries a weighting of 36 percent has been on a gradual rise in the last three months.

"Drought has contributed heavily on the current situation which has been worsened by dwindling maize imports from neighbouring countries, forcing Kenya to source the staple from Mexico, a move that certainly is expensive," said Henry Wandera, an economics lecturer in Nairobi.vHe noted that Kenyans should not expect the current prices of food to come down due to elections, which often tend to increase money circulation in the economy leading to hyper-inflation before and after polls.


world-grain

Readers choice: TOP-5 articles of the month by UkrAgroConsult