Kenyan households will have to wait a little bit longer and continue digging dipper into their pockets before maize flour prices stabilize as directed by President Uhuru Kenyatta.
In a statement from the Cereal Millers Association (CMA), in the initial weeks of the import program, some millers will have access to imported maize and others will not, and thus until adequate imported grain stocks are distributed across all the mills, Maize flour prices will still be high.
New Maize flour prices are expected to be implemented in late June or early July, settling at around 125 shillings to 135 shillings per every 2-kilogram packet level.
As they wait for more maize to be imported into the country, CMA has released a total of 450,000 bags of maize from the Strategic Food Reserve to its members following a directive from the government on its intervention in assuring food security across the country.
CMA confirmed to have sold out the stated number of bags of maize at a price of 3,000 shillings per every 90-kilogram bag.
The set price catered for transportation and handling costs from the National Cereals and Produce (NCPB) facilities to the respective member mills. It temporarily enabled the reduction in retail maize flour prices from between 145 shillings and 155 shillings per 2-kilogram packet to 119 shillings and 130 shillings per packet, a significant reduction in light of the high cost of living.
In spite of the NCPB releasing the 450,000 bags, price reductions have unfortunately been temporary as these stocks represented only 8 to 12 days of milling for the Association’s members. As a consequence, millers were either forced to blend the NCPB stocks with significantly higher priced stock purchased from the market or quickly exhausted their allocated stock and were forced to return to buying grain from a market that is characterized by scarcity and prices in excess of 4,000 shillings per 90-kilogram bag.
According to CMA, the worsening scarcity of grain now has millers buying the commodity at between 4,300 shillings and 4,500 shillings per 90-kilogram bag.
“Some millers are unable to produce enough maize flour to meet customer demand because either they do not have access to adequate grain and/or are unable to compete with the prevailing market prices of maize flour,” read a statement from CMA.
The firm added that lack of sufficient grain in the market, along with the high prices being paid for what is available, are among factors responsible for increases in the ex-mill price of maize. Shortage of maize flour in the market is said to be as a result of incremental price increases on the retail shelf.
CMA further disclosed that supply of Ethiopian maize has slowed down further over the past week, with the limited quantity available trading at 4,200 shillings and 4,400 shillings per 90-kilogram bag. Zambian maize, on the other hand, is expected to be priced at similar levels but has yet to begin moving out of the country.
“We expect that the all the value chain players including traders, grain handlers, transporters, distributors, wholesalers and retailers to join our members in passing on the reduced prices to consumers, offering them a reprieve from the current high prices,” said CMA Chairman Nick Hutchinson.