Millers recommend higher flour price

Wednesday March 18 2020

Millers have adjusted the Recommended Retail Price (RRP) for a two-kilo packet of flour by up to 10 percent in one week as maize shortage continues to bite.

Unga Ltd, the makers of popular Jogoo brand, has adjusted its RRP to Sh117 this week from Sh109 last week while Capwell, which owns Soko has adjusted its price to Sh120 for a two-kilo packet. This has forced retailers to adjust only marginally, with others selling below the recommended price.

“I am actually below RRP, the prices have been changing including yesterday,” said Willy Kimani, chief operating officer Naivas Supermarket.

A spot check at Naivas indicated it is selling Soko brand at Sh118, which is below the Sh120 recommendation.

Each miller sets the RRP when releasing stocks to wholesalers or retailers to guide them in pricing. “We cannot dictate to the millers the price at which they can sell the flour, it is their own choice,” says Rajan Shah, chief executive officer Capwell Industries.

Competition Authority of Kenya is in agreement with the millers as the boss Kariuki Wang’ombe says retail shops are free to set the price that they want as so long as they are not colluding.

“Retailers are free to set the price that they want as so long as they do this independent of each other,” said Mr Wang’ombe in an interview yesterday.

The cost of maize flour-a major staple for most homes in Kenya has gone up by about 28 percent in a space of two weeks to hit a high of Sh117 for a two-kilo packet, marking one of the steepest rise within a short span of time.

High prices of maize flour has been occasioned by a sharp increase in price of a 90 kilogramme bag of maize from Sh2,000 last month to Sh3,200 with processors anticipating the prices will rise further in the coming days.