Looming Wheat Crisis as Production Drop Sharply

By Jane Muia / Published January 19, 2023 | 10:55 am

KEY POINTS

Kenya produces only 14 percent of the local wheat consumption of 900,000 tonnes per year. The country relies on imports to bridge the deficit. In 2021, it produced 250,000 tonnes of wheat which were a decline from the 405,000 tonnes produced in 2020.

KEY TAKEAWAYS

A kilo of wheat is now ranging between 21.16 and 48.83 shillings. Wheat products such as wheat flour shot up to more than 200 shillings up from about 170 shillings in may last year.

Farmers want the government to invest more in wheat production to ensure enhanced production and cut imports of the commodity.

Wheat prices are likely to remain high in the coming days on the back of a sharp decline in production of the commodity in Ukraine, one of the world’s top exporters.

Wheat production in Ukraine has dropped to 65 million tonnes in the latest crop season from 108 million tonnes a year earlier, according to an official.

“The price of grain globally will increase because of a decline in production in Ukraine,” said Ukraine Agriculture Policy Deputy Minister Dmytrasevych Markiya.

The decline has been attributed to several factors including high prices of fertilizer and war that interrupted farming activities.

Millers had anticipated that the price of the grain would drop starting this January but the latest development in Ukraine may see consumers continue paying more for wheat products.

Now, the projections that wheat prices will be going even higher in the future are worrying, but what are other countries, especially in Africa, doing to ensure they can sustain the commodity?

In Kenya, for instance, wheat prices have shot up from about 39,295 per ton to 52,394 per ton.

Many traders have faced margin calls from their future brokers, forcing them to transfer the burden by increasing the regular price in their commodity trading accounts to cover their losses.

A kilo of wheat is now ranging between 21.16 and 48.83 shillings. Wheat products such as wheat flour shot up to more than 200 shillings up from about 170 shillings in may last year.

Farmers want the government to invest more in wheat production to ensure enhanced production and cut imports of the commodity.

The effects of the local production decline were heavily felt last year along with the effects of the Russia-Ukraine war and the severe drought in the country which added pressure on the price of the commodity and its products.