Maize flour price increase is unfair, minister tells millers

The government has accused millers of unfairly increasing the price of maize flour, saying the move is unjustified because a recent food security report indicates the country has enough stocks to last the next three months.

The report for the month of April shows that there were 10 million bags of maize in the country as at the end of last month.

According to the report, traders are holding 2,472,830 bags, millers 442,710 bags, and the cereals board is having 2,778,760 bags. 

In an interview with the Daily Nation, Agriculture Cabinet Secretary Willy Bett says the State this year set the price of maize at Sh2,300 per bag from Sh2,800 last year to allow millers to acquire their stocks at a lower cost and pass the same benefits to consumers.

The government normally sets the price of maize that is purchased by the National Cereals and Produce Board (NCPB) to act as a benchmark for the market price.

Mr Bett said he would meet millers in the coming days to raise concerns over the high cost of the staple that has put households under pressure in the wake of rising cost of living resulting from an increase in the price of fuel.

“Millers cannot purport that there is a shortage of maize in the country as a justification for price increase. The current cost of the flour is uncalled for,” says Mr Bett.

The price of a two-kilogramme packet of maize has been rising over the past two months, with all the major brands retailing at 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 most supermarkets. Millers say the cost will continue going up until they get adequate stocks.

The State says that the current price of maize is Sh2,400 per bag even though millers say that they are buying a 90-kilogramme bag at Sh2,700.

Millers have always been referred to as cartels, which connive to increase the price at a go, a tag that they have fought hard over the years to shed.

The Cereal Millers Association (CMA) says the price of flour is informed by the market forces of demand and supply and that it has never had a hand in fixing the cost.

CMA Chairman Nick Hutchinson says the current price increase has been sparked by the shortage of maize, which has made it hard for firms to accumulate stocks for milling.

“We have not been able to accumulate stocks due to tight supply of maize in the market. Whatever we get is milled immediately,” said Mr Hutchinson.

NCPB Managing Director Newton Terer said there are enough maize stocks and that there was no need for millers to increase the cost of flour.

“We have sufficient maize stocks at the moment and the purported shortage could just be an artificial one,” said Mr Terer.