Wheat Imports Drop 89% as State Orders Millers to Exhaust Local Supply

Following the state directive for millers to buy all the local supply of wheat before shipping in the grain, wheat imports in June fell by 89 percent.

According to the Ministry of agricultures, June imports slumped from a high of 2.5 million bags the previous month to 267,000 bags.

During the month, the Ministry instructed millers to purchase a 90kg bag of local wheat at 3,700 shillings.

The millers were issued with quotas they should meet based on their capacity to mill before they are allowed to import. Once this condition of domestic allocation has been met, the processors will be given import permits.

Meanwhile, official data from the Ministry shows that currently, there are 2.8 million bags of wheat, out of which 554,000 bags are held by farmers, whereas millers and traders have 2.29 million bags.

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The imports, in the first five months of 2021 had risen by 12 percent as millers increased their volumes ahead of the budget reading over fears that the Treasury would revise shipping taxes upwards.

In that period, wheat imports reached 8.1 million bags from 7.1 million bags during the same period in 2020.

The State began the quota system for wheat purchasing in 2019 as it sought to protect farmers from cheap imports.

Farmers across the country have been demanding a premium price for their grain claiming that the increased cost of production has been reducing their profit margins.

Millers, on the other hand, stated that the high local prices had made them uncompetitive in the market as the government forces them to pay farmers a higher cost per bag. This, according to them, is why they prefer imports.

Wheat imports in Kenya attract a 10 percent duty, which is still cheaper compared to the locally produced ones.

Premium grade wheat imports, for instance, go for between 3,100 and 3,500 shillings for a 90kg bag.

Kenya is a net importer of wheat, bringing in two-thirds of its requirement to meet the annual consumption of over 900,000 tons against the annual local production of 350,000 tons.