COSTLY MAIZE FLOUR PRICES TO STAY

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TAX CUT MAY NOT PROMPT IMMEDIATE COST REDUCTION
Costly maize flour prices will continue to torment Kenyan consumers as Supermarkets retail the precious commodity at a price ranging from 198 to 240 depending on the brand and location, this being a 100% increase. Ironically, This is despite the introduction of measures by the government to contain the situation by suspension of fees and levies on imported grains. According to millers, lifting of levies and charges on imported maize will translate to a ‘minimum’ reduction due to challenges in sourcing for the grains to sustain crushing operations for the next three months before the next crop is ready for harvesting.
Consumers will therefore have to continue paying more for costly maize flour due to an “acute shortage” in the regional market with high suspicion of both greed and hoarding of the commodity by middlemen so as to maximize. “As much as we appreciate the withdrawing of charges on imported maize, it is too early to determine the cost of flour after implementing the changes in the levy, considering the biting shortage of maize in the regional market,” said Kipngetich Mutai, chairman of the Grain Belt Millers Association(GBMA).

Maize prices have skyrocketed with 90kg bag being sold at Sh6,200 up from Sh5,400 two weeks ago, forcing most millers to suspend operations to cut down on costs hence creating demand.
Agriculture Cabinet Secretary Peter Munya in a notice issued three days ago, suspended the payment of fees and levies on imported maize for 90 days to cushion millers and consumers from acute maize shortage and help lower costly maize flour prices.

The millers in a petition to the national government said they face challenges importing the grains from Tanzania due to tough conditions set by the East Africa Community (EAC) member state which is known to occasionally flout the objectives of the community. “Although there is some maize in Tanzania, the stringent conditions on the export license are making it hard for our members to import the grains,” added a distraught Mr. Mutai.

Among the numerous charges they pay per truck loaded with 311 bags of maize are kSh7,200 to the Kenya Bureau of Standards (Kebs), Sh500 to Kenya Plant Health Inspectorate Services, and kSh10,000 for cess among other levies. The millers want the government to negotiate with Zambian and Tanzanian authorities to facilitate the importation of six million bags of maize to meet the current shortage and lower flour prices that have hit Sh 230 up from Sh120 per two-kg packet.

Maize floor section at a local store Maize floor section at a local store- image by Business Daily

 

“It is also critical that government supports transport and logistics for the importation of maize from these countries. This is due to the high cost of transporting produce from neighboring countries, which ultimately escalates the price of finished products,” added the millers in their petition.

TRANSPORTATION COSTS A NIGHTMARE

 Maize imports from Tanzania retail at Sh5,400 per 90-kg bag while that from Zambia and Malawi lands at Sh5,200 which the millers have termed as too expensive. “Kenyans are already struggling with rocketing prices of other commodities. The implementation of these recommendations will be crucial in mitigating rising costs of wheat and maize-based commodities,” said the millers.

The petitioners include the Kenya Association of Manufacturers (KAM),  United Grain Millers Association (UGMA), 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) and  Agriculture Sector Network (ASNET).

Maize production is estimated at 3.2 million metric tons annually against the consumption of 3.8 million metric tonnes with the deficit being bridged through imports from EAC member countries.
The country produces approximately 100,000 metric tonnes of wheat against an annual demand of 2.4 million metric tonnes, hence relies heavily on imported wheat estimated at – 96 percent of the produce.

“Kenya imports 60 percent 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 importation of wheat from the  USA, Argentina, Australia, and Canada.  It is however strange that Mexico and Brazil are missing from the alternative sources. This has been aggravated by the total ban of imports from India by the Kenyan government,” explained the millers.

Ugali saucer now a rare service Ugali saucer now a rare service

 HOTELIERS ARE KEEN ON DAMAGE CONTROL

In a hilarious turn of events, eatery Customers will no longer receive traditional “ugali saucer” after hoteliers enforced an array of cost-cutting measures to endure the costly maize flour prices.
The hoteliers have suspended ‘ugali saucer’ until further notice to cope with the deteriorating maize supply that has pushed flour prices beyond Sh200 per 2kg packet, this being a 100% increase.
“Kindly take note that ugali saucer has been suspended until further notice due to biting maize shortage that has impacted negatively to our operation,” read a notice at one of the food kiosks in Nakuru with Kisumu and Eldoret eateries following suit.
Millers have expressed fears of further rise in maize flour prices as the supply diminishes. At one time in point and to be precise during the last 2 election years at a time like this, politicians were capitalizing on the promise of making a 2kg packet of maize flour available at a cost of 40 kshs. It is no surprise that maize is being mentioned in the current campaigns.

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