Cost of maize flour to increase

Kenyans should brace themselves for an increase in the cost of maize flour, after millers imported the grain at a high of Sh2,900 per bag. The Nation learnt on Thursday that millers had imported close to 600,000 bags, expected to last six months.

The millers were hoping that the new stock would ensure a steady supply of maize flour, said Mr Salim Bajaber, a director at Pembe Millers and a member of the Cereals Millers Association.

“The maize flour will now be available, but the cost of getting the imported maize has been high,” said Mr Bajaber. The price of the imported maize is about Sh500 more than the market price.

Until the first week of February, the ex-factory price of maize flour was Sh65 for a 2kg packet. The price of the flour now ranges between Sh90 and Sh95, up from Sh72. In late January, the government allowed millers and other private firms to import three million bags of maize duty free after a shortage of the grain following a near collapse of the country’s grain marketing system.

At the time, Agriculture minister William Ruto announced that the Strategic Grain Reserves had only 1.3 million bags and due to this precarious situation, two million bags of maize would be bought to replenish stocks by mid-February.

However, it has emerged that the National Cereals and Produce Board has run into serious financial difficulties since it ordered 600,000 of the two million bags.

The reserve has dropped to an alarming 878,860 bags against a target of six million and a monthly national consumption of three million bags. The grain buyer has found it increasingly difficult to buy maize from local farmers.

The NCPB was hoping to buy 4.57 million bags locally, but this has now been complicated by poor harvest in 2009, wasted grain following the post-election violence early last year and farmers’ refusal to sell their grain to the government.

The lack of grain in the reserves complicates the sale of cheap maize flour started after the government failed to arm-twist millers into lowering flour prices, which had shot to Sh120 for a 2kg packet in December 2008.

The government ordered the board to sell maize to millers at a lower price of Sh1,750 to mill it into flour that retailed at Sh130 for a five-kilogramme bag.

On Wednesday Mr Ruto survived a censure motion in Parliament over claims of mishandling maize stocks. Elsewhere, more than 90 per cent of subsidised maize is yet to reach its destination.

According to Mr Lameck Oyugi the NCPB regional manager for Nyanza and Western, only 500 bags of maize had been sold since the sale began two weeks after repackaging them into 20 kg bags. The NCPB had received 10,000 bags of maize weighing 90kg each mid last month to repackage into smaller units.

“We are experiencing distribution problems in the sale of the repackaged maize because we were not intended to make retail sales,” said Mr Oyugi.

Packaging materials that were dispatched for the initial re-bagging fell short and the maize could not reach Kenyans in far-flung rural areas. But the bags were expected before the weekend, said Mr Oyugi, adding that the distribution would resume soon.

The 4,500 bags were sold to residents of Kisumu, Bondo, Yala, Kendu Bay, Homa Bay, Chavakali, Hamisi, and Butere. The maize in 20-kg bags was being sold at Sh400.

Additional report by Dan Obiero