Maize Grain Shoots 13% High as Basic Commodity Prices Continue Rising

Maize Grain Shoots 13 Percent High as Basic Commodity Prices Continue Rising

By Lynnet Okumu / Published August 3, 2022 | 11:10 am

KEY TAKEAWAYS

According to the Kenya National Bureau of Statistics, the local maize production in 2020 stood at 42.1 million bags, down from 44.0 million bags in 2019. The country’s maize flour production over the last five years has averaged 2.8 million tons annually.

According to the latest Kenya National Bureau of Statistics (KNBS) report, prices of maize grain(loose), increased by 13.0 percent during the month of July.

A 90 Kg bag of maize has been retailing as high as 6000 shillings in Nairobi. Meanwhile, a 2Kg packet of maize flour retailed as high as 230 shillings before the president ordered a reduction of the same to 100 shillings in July.

The move, Uhuru said, was part of the government’s stimulus program aimed at cushioning Kenyans from the inflated cost of living. The subsidy also comes weeks after hundreds of people demonstrated in Nairobi against the prohibitive cost of living.

Since the announcement, there has been a scramble in retail stores, as the subsidized flour remains in short supply.

Most Kenyans determine the state of their lives by one thing – the price of basic commodities. Most households equate that to the cost of a 2kg packet of maize flour in the shops. Maize meal is the key ingredient for “ugali” a local delicacy and staple food.

When it goes up then Kenyans project shortages of the important commodity that comes with economic hurdles. This is besides the rising cost of other basic commodities such as cooking oil and Bar soap.

In recent months, maize shortage has been reported in some counties. Traders also hold concerns about high inflation, the impact of the war in Ukraine on commodity prices, supply chain disruptions, and the impact of the depressed rainfall on agricultural production.

The depressed supply of maize in the country has also been attributed to the past low prices that led to the diversification and branching out to more lucrative crops.

The rapid increase in basic commodity prices has pushed the annual inflation rate for July to 8.3 percent, the highest reading since September 2017, a year that the country witnessed a nullified election. In June 2022, the annual inflation rate stood at 7.9 percent.

High inflation in 2017 was primarily caused by drought, according to experts, with 2022 being pegged on global factors.

According to economists, elections in Kenya have traditionally come with the distribution of handouts, which lead to more cash flow against fewer goods.