High cost of maize flour to eat into families’ earnings

Kenyans are staring at tough times ahead with the rising cost of maize flour which is set to reverse the easing cost of living that last month dropped to a 36 month low, helped by low food and fuel prices.

The price of a two kilogramme packet of maize has been rising in the last one month with all major brands retailing at or above Sh100, piling pressure on the majority of households who rely on the commodity as their staple.

A two kilogramme packet of Jogoo is selling at Sh110, Pembe Sh101, Soko 101 and Hostess Sh147 in supermarkets. Millers say the cost will continue rising until they get enough stocks.

The cost of food and oil are major drivers of inflation as they play a significant role in determining the cost of living.

Fuel prices are also set to go up following the rebound of crude oil that is now retailing at $50 per barrel from $39 last month.

Millers say they can hardly get enough stocks with the government having said last month that farmers are hoarding their harvests in anticipation of higher prices.

“The supply of maize has been dwindling in the market and millers can hardly get enough stocks, it has been a case of hand to mouth,” Cereal Millers Association Chief Executive Officer Nick Hutchinson said.

The Kenya National Bureau of Statistics (KNBS) data shows that inflation eased to 5.0 per cent in April from 5.27 per cent a month earlier, marking it the lowest since June 2013.

“In totality food inflation stood at 6.84 per cent, which is the lowest recorded in the recent past,” KNBS says.

INFECTED MAIZE
Mr Hutchinson says the shortage of maize can also be attributed to aflatoxin, a deadly fungi infection that has affected nearly half of the stocks that millers are receiving at the moment from the short rain crop.

He said a lot of maize coming in from eastern region, which would have supplemented the available stocks is infested with aflatoxin, restricting them from purchasing it for flour making.

“Almost 50 per cent of maize is being rejected due to quality aspects including high levels of aflatoxins,” he said.

Cases of aflatoxin are high in Kenya and thousands of people, especially in the countryside, fall victim to this menace given the fact that the flour that they grind in the local posho mills does not undergo testing.

National Cereals and Produce Board (NCPB) is selling close to 700,000 bags of maize held at the Strategic Food Reserve to help in taming the rising cost of flour.

Millers are currently buying maize at between Sh2,600 and Sh2,700 for a 90 kilogramme bag from Sh2,000 in January.

The cereals board is selling the same quantity at Sh2,300 for grade two and three and grade 4A is going for Sh1,600 and grade 4B trading for Sh1,400.

Millers are banking on the Tanzanian crop that was been harvested last month to address the shortage, but they are not certain whether the stocks could find their way to Southern African countries of Malawi, Zambia and South Africa where it attracts better prices.

Kenya mainly depends on imports from Uganda and Tanzania to bridge the deficit of 20 million bags annually.

A report by Eastern African Grain Council says that imports from Tanzania dropped 50 per cent compared to grains that were shipped in between October and December, subduing the available stocks.

Maize prices have a big effect on inflation in Kenya’s economy where it is the staple food and accounts for a significant share of poor households’ budget.