Confusion as cheaper maize meal goes on sale

Confusion marked the distribution of the subsidised maize flour, which is supposed to go on sale on Wednesday at Sh130 for a 5-kilo bag.

Millers across the country said they had little information about how the flour was to be distributed. They said their contract with the Government entailed milling the new brand and handing it over to the cereals board.

Supermarkets too were not sure whether they would be asked to sell the flour.

Nakumatt operations director Thiagararajan Ramamurthy said his chain had not yet received any guidelines on the distribution of the flour.

“This far we have not received any of the flour to distribute. However, my concern is how I could have two prices for two similar commodities. How can I tell who should buy at what price?” he asked.

Agriculture minister William Ruto launched the retail sale of the flour during a brief ceremony at the National Cereals and Produce Board headquarters in Nairobi.

However, millers and other players in the industry said it was still not clear how the flour was to be distributed.

Prime Minister Raila Odinga had last week said that the flour would be sold in low-income areas, but that consumers from other areas were also free to buy it. Mr Ruto said the maize flour would be distributed by the cereals board.

Under the plan, the board will distribute maize to millers for milling and later collect it for distribution to retailers.

With the other brands of flour, millers buy maize from the board, mill and package it and sell the flour to wholesalers, who then sell to retailers.

On Tuesday, Mr Munir Thabit, a finance officer at Mombasa Maize Millers, said that his company had not yet received the maize for the new brand.

In Mombasa, no miller had received the maize and only six in Nairobi had been supplied albeit in small quantities.

Unga Limited managing director Nick Hutchinson said his firm had received “a few bags” on Tuesday afternoon.

“Deliveries to millers started streaming in on Sunday and were going on Tuesday. Our contract ends at milling and NCPB takes over the distribution,” he said.

Mr Ramamurthy said his chain adds a 10 per cent margin on the price it buys goods from suppliers. If the chain buys a kilo of flour for Sh65, it resells it for Sh72.

“I am getting supply at between Sh80 and Sh90 and I sell at between Sh89 and Sh90. But we are for reduced prices since maize flour is one of the products that are core to our customers,” he said.

But a manager at Woolmatt Supermarkets, Mr Rophence Kadenyere, said only the customers would decide on the product they want.

“It is just like we have Hostess flour, which is a little more expensive than the others but there are buyers. It depends on one’s taste and buying capability,” he said.

Mr Kadenyere asked the Government to give guidelines on how the new brand was to be sold to ensure that only deserving customers got it.

About 400,000 bags of the subsidised maize flour is expected to be available in the market today, but it was not clear how this would be achieved given the concerns raised by millers.

While launching the brand, Mr Ruto said the flour, to be packed in 5-kilo bags would be distributed to retailers on Wednesday morning across the country and would be sold at Sh130 per bag.

When key Government officials met millers for talks on how to reduce maize flour prices, they agreed that the new brand would be distributed to areas such as slums where the majority of poor Kenyans live.

However, Mr Ruto onnTuesday said that the flour would also be available in supermarkets.

He also said that millers were expected to start distributing another brand that will retail at Sh72 for a 2-kilogramme bag in the next few days, which is about Sh48 cheaper than the average price of maize flour two weeks ago.

Mr Ruto said that millers were already receiving maize from the Government. The millers last week agreed to charge the Government Sh200 for milling each 90-kilo bag of the subsidised brand.

“We are still within the time frame of seven to 10 days announced last Monday, and we hope that within the next two days, Kenyans will be able to buy cheaper flour," Mr Ruto said when he launched the “feed the nation” programme.

Staple food

The price of maize flour, a staple food for majority of Kenyans, had skyrocketed to a high of Sh120 due to an artificial shortage of maize in the country.

Last December, the commodity was retailing at Sh48 for a 2-kilo pack. The price of flour was a campaign issue at the time with some candidates promising to reduce the cost should they win the election.

The latest shortage was blamed on a cartel of politicians and businesspeople, who have been buying the maize from the cereals board and reselling it to millers for a profit of about Sh1,000 per bag.

A group of 12 MPs was believed to have been behind the shortage.

Additional reporting by Aruhanga Sudhir