Reprieve for the poor as maize meal price cut

A new brand of maize flour is to be sold to the poor as part of the Government’s effort to bring down the cost of the staple food.

The new brand will cost Sh26 per kilo. However, the other brands will sell at Sh72 for a 2kg-packet, down from an average of Sh98.

The new prices are expected to become effective next week.

While supporting the new prices, Prime Minister Raila Odinga said this was the best deal they could get for Kenyans.

He said the prices were negotiated and not forced on the millers.

“We must therefore secure the interest of both farmers and the consumers . . . that is why we settled for these rates,” he said.

Smaller packages

The new brand to be sold in poor neighbourhoods will be in packets of five and 10 kilogrammes, raising the possibility that those who buy it will have to resell it in smaller packages to make it more affordable to poor families.

Farmers are also set to benefit after National Cereals and Produce Board was directed to buy a 90-kg bag of maize for Sh1,950. Previously, the same bag cost Sh1,700.

According to Agriculture minister William Ruto, the new maize meal brand will be of the same quality as the other regular brands.

Millers also agreed to dedicate between 30 per cent and 40 per cent of their milling capacity grind the new brand for the National Cereals and Produce Board.

They will charge the board Sh200 to mill a 90-kilogramme bag of maize. Under this arrangement, 15,000 bags of maize will be milled per day.

Mr Ruto described the agreement as “the best deal” the Government could get.

Following the agreement between the Government and millers, the Agriculture ministry will now release 1.2 million bags of maize from the strategic reserve held by the cereals board. It will also authorise the importation of five million bags by accredited dealers to recover the stock.

The maize will be sold to millers at Sh1,750 for a 90-kilogramme bag.

The deal was reached after three days of consultations after the rising cost of maize flour, which is used to make the staple Ugali meal, rose to a high of Sh120 a week ago from a low of Sh48 in December last year.

According to Mr Ruto, the ex-factory price for a 2kg packet of regular brands of maize flour will be Sh65. Supermarkets and other retail outlets will then be expected to sell the same brands at Sh72.

Earlier in the morning, the Government and the millers had failed to reach a compromise on the price of the staple, forcing the meeting to be adjourned.

However, the Nation learnt that the stalemate was caused by disagreements over the ideal price of flour with the Government maintaining it be sold for Sh55 for a 2kg packet.

However, the millers demanded that the prices be set at the cost of at least Sh60.

It was agreed that the millers consult among themselves, before reporting back to the Prime Minister for a second round of talks.

It was widely expected that the Government would announce the new prices of the staple food at 10am, at a press conference that had earlier on been scheduled at Mr Odinga’s Treasury Building offices.

Last week, maize flour was selling at between Sh95 and Sh98, down from Sh120 the previous week as compared to Sh48 last December.

Lowering food prices was one of the campaign issues by parties ahead of last December’s election.

On Thursday, the Cabinet approved a decision to release 700,000 bags of maize to millers in the next three weeks. It also agreed to import five million bags of maize.

On Monday, Mr Ruto authorised registered millers to import five million bags of maize duty-free to contain the shortage of the product.

He also directed the National Cereals and Produce Board to immediately release 1.2 million bags of maize to millers at Sh1,750 and ordered millers to stop buying maize from farmers.

Yellow maize

The Government will only allow millers to import 90 million kilos of yellow maize for animal feed duty-free to release white maize for human consumption.

Millers immediately supported the move, promising to fully comply with the new directive.

Through their representative, Mr Diamond Lalji, the millers said the increase in the prices of flour recently witnessed in the market had gone “out of hand”.

Meanwhile, Mr Odinga issued a strong warning to businessmen hoarding maize to push up the price, saying they would be punished.