Debate rages on over second grain handler

• Firm’s monopoly in checking out cereals from port blamed for food shortage

As the country grapples with the task of feeding more than 10 million Kenyans facing starvation, food politics have resurfaced, centred around the sole grain handler at Mombasa port.

Prime Minister Raila Odinga has once again been drawn into the row surrounding the never-ending battle on licensing of a second grain handler to compete with Grain Bulk Handlers Ltd (GBHL).

Kangundo MP Johnstone Muthama accused Mr Odinga of supporting the monopoly enjoyed by the grain handler, a situation millers have blamed for skyrocketing prices of wheat and maize flour.

The monopoly had made importers pay punitive Vessel Delays Surcharge (VDS) slapped by shipping lines for unusually long delays at the port, he said, adding that the charges were passed on by millers to consumers, making flour prices high.

The MP further claimed that grain imports had surpassed the company’s capacity, leading to unusually long delays by ships.

Mr Odinga has since said that grain imports had not surpassed Grain Bulk Handlers’ capacity adding that it was not necessary to have a second grain handler.

Violence and drought

Debate over the controversial issue has been rekindled at a time when the country is facing a serious food shortage, blamed on, among other things, last year’s post election violence and drought.

Grain Bulk Handlers terminal manager Mustakim Shivji said the facility can handle three million tonnes of grain a year, but it was only handling slightly more than a million today.

But Mr Munir Thabit, the financial manager at Mombasa Maize Millers said that when the country was recently making huge imports of maize to address the food shortage, some ships had to wait for up to 20 days before they could offload their cargo at the Grain Bulk Handlers’ terminal.

“Grain shipping lines normally start charging demurrage charges after four days,” Mr Thabit said, adding that the charges sometimes went as high as $50,000 (Sh3.9 million) a day.

“When this cost is passed to the consumers, it becomes very difficult to reduce the cost of flour despite a drop on import duty,” he said.

However, Mr Shivji accused millers of exaggerating amounts paid as demurrage to justify high prices of flour.

He said delays on shipping lines were largely a result of unplanned imports rather than grain handling at the terminal. “For instance, currently we do not have a single vessel waiting to discharge grain,” he said.

Whereas the installed capacity to discharge grain at Grain Bulk Handlers is more than 11,000 tonnes a day, it is only 2,500 to 3,000 tonnes that are being delivered from the company’s silos daily.