Cost Of Unga To Rise By Next Week as Subsidy Program Ends

The price of a 2 kg packet maize flour is expected to rise from Ksh 90 when the subsidy program comes to an end this month.

In September, the Ministry of Agriculture extended the maize subsidy program citing delay in harvesting in most parts of the country at a cost of an additional Ksh 3 Billion (0.04 percent of estimated FY17/18 GDP).

The subsidy program has helped address the supply of the staple which had propelled maize flour (2kg) to Ksh150 level in April.

The program was intended to end September after it commenced in May to reduce the price of a 2kg packet of maize flour to Sh90 from Sh140-150.

The National Cereals and Produce Board is currently buying maize from farmers and traders at KSh3,000 for the 90-kg bag, up from KSh2, 300.

The Famine Early Warning Systems Network (FEWSNet) October bulletin said: “Staple food prices are expected to remain higher than recent five-year averages through March 2018 in spite of the expected seasonal decline during the October-to-January harvest period.”

However, “Using data from the Ministry of Agriculture, forecast that wholesale maize prices between October 2017 – May 2018 in the urban reference market of Nairobi are projected to remain 21 – 27 percent above average, ranging between KES 3,400 – 3,900 for a 90-kilogram sack.”

“Nearly complete harvesting of the long rains maize crop in the high and medium-producing areas is likely to be about 10 percent below average, but is still helping to improve food availability countrywide and moderate staple food price increases…Regardless, staple food prices and maize imports are expected to remain above five-year averages through May 2018 due to atypically high demand,” said FEWSNet.

Between July and September, Kenya imported 92 percent of the region’s imports, totaling approximately 144,329 metric tons (MT). Out of these maize imports, 22, 35, and 43 percent were from Tanzania, Uganda, and Ethiopia, respectively.

Latest data from the Regional Agricultural Intelligence Network as of December 28th, maize prices in East Africa still shows that Nairobi is the most expensive at Ksh 3,780, Dar-es-Salaam (Ksh 2,893), Kigali (Ksh2,193), Kampala (Ksh 1,970).

Consequently, United Nations Food and Agriculture Organization (FAO) said the need for food assistance in Kenya remains high, with 2.6 million people being severely food insecure.