Households Set to Enjoy Cheaper Maize Flour as Supply Increases

Kenyan households are set to enjoy lower maize flour prices following an increase in the supply of cheap maize from Uganda into the Kenyan market.

In the past week, a 2-kilogram packet of maize flour has been retailing at a shelf price of below 110 shillings from the previous 115 shillings.

Millers have stated that the prices might decline even further to less than 100 shillings in the coming weeks following a partnership that was signed between the Kenyan and Ugandan governments on the supply of maize.

A 90-kilogram bag of maize is being imported at a price of between 2,300 shillings and 2,500 shillings compared to the prices at home of 3,200 shillings.

Kenya signed a deal with Kampala to buy 6.6 million bags of maize at 2,050 shillings each to plug a deficit of more than five million bags following poor weather last year and curb a rise in flour prices.

“The government advised millers that it would release maize from the cereal board, which would, in turn, bring the price of a packet further down in the month of April,” said Peter Kuguru, United Grain Millers Association chairman.

Flour prices rose to 115 shillings for the 2-kilogram packet compared to 90 shillings in December after the government ended the 6-billion-shilling subsidy to maize importers.

But the prices have since fallen by at least Sh6 across brands.

Further reduction will ease pressure on inflation, which fell to 4.46 percent in February from 4.83 percent a month earlier, pushed by a fall in some food prices.

A spot check on some retail outlets within Nairobi’s central business district revealed a packet of Jogoo brand was retailing at 109 shillings, Pembe 103 shillings and Jimbi at 100 shillings.

The Uganda deal look set to hurt farmers who had expected to profit from a forecast rise in maize prices to last year’s level of above Sh4,000 shillings a bag.

Maize prices rose to above 3,000 shillings for a 90-kilogram bag after the government started buying from farmers at 3,200 shillings in a 6.7-billion-shilling plan.