The Ministry of Agriculture and Livestock Development will open imports of 5.5 million bags of yellow maize to ease pressure on the white variety of the commodity, whose prices have jumped by as much as 26.47 percent since December, hitting households reliant on the staple food.
Cabinet Secretary Mutahi Kagwe said that the State would grant a 50 percent duty waiver on yellow maize imports for one year.
“The Ministry of Agriculture and Livestock Development notes the growing competition between animal feed millers and maize millers for human consumption over the limited maize grain stocks available in the country. As a result of this increasing demand, the price of a 90-kilogramme bag of maize has risen by approximately 26 percent compared to three months ago,” he said.
The rise in maize prices has been reflected in the cost of maize flour as millers have passed on the changes to consumers.
For example, an analysis of market data by the Kenya National Bureau of Statistics shows that a two-kilogramme packet of fortified maize flour sold for an average of Sh165.05 in March -- the highest level in 13 months.
This price represents an increase of 2.94 percent from February and 14.11 percent from last October, the official data shows.
Millers have blamed the renewed upward price pressure on flour, or unga as it is more commonly known, on reduced domestic supplies, forcing them to rely on imports from neighbouring Tanzania.
“Farmers are holding minimal stock [of maize grain], while traders are speculating on price increases,” Paloma Fernandes, chief executive of the Cereal Millers Association, said in an email response to questions about the rising maize prices.
“[Animal] feed millers are competing for the same maize supply as no waiver has been gazetted for imported feed maize, further increasing demand,” she added.
To address the situation, Mr Kagwe said the government would allow importation of yellow maize by qualified feed millers with sufficient capacity.
“The objective is to reduce pressure on local white maize stocks by shifting animal feed millers to yellow maize. This will allow millers focused on human consumption to access available maize at fairer prices, ultimately leading to reduced production costs and more stable unga prices for consumers,” the CS said, adding that the imported maize will be non-GMO (genetically modified).
The Association of Kenya Feeds Manufacturers and Poultry Breeders Association of Kenya had petitioned Mr Kagwe to intervene by facilitating the opening of a window for duty-free imports of maize from outside of the East African Community trading bloc.
Mr Kagwe urged farmers to consider producing more yellow maize to balance the market. The animal feed industry has an annual demand of about one million tonnes.
“Additionally, the government will release regular maize from the National Food Reserve to millers producing maize flour for human consumption. This intervention aims to cushion the mwananchi from the impact of soaring unga prices,” the CS said.
