Millers expect maize flour price drop in July

The quest to put an affordable plate of ugali on the table for most Kenyans appears to be a tall order, with millers raising alarm of the high cost and unavailability of maize in the market.

Maize millers have expressed concern that the cost of maize flour could go up in coming weeks owing to maize supply constraints.

According to the Cereal Millers Association (CMA), millers have already exhausted the 450,000 bags of maize released by the National Cereal and Produce Board last month, forcing them to rely on expensive maize to process into flour.

Based on the amount of maize available, millers also say that there were forced to blend maize from the strategic grain reserve with that in their stocks complicating efforts to lower the cost of maize flour.

Cereal Millers Association chairman Nick Hutchinson said on Monday that a 90 kilogram bag of maize is currently retailing at an average of Sh4,300 which could see prices rise in the short term.

“Millers were either forced to blend the NCPB stocks with significantly higher priced stock purchased from the market or quickly exhausted their allocated stock and were forced to return to buying grain from a market that is characterized by scarcity and prices in excess of Sh4,000 per 90 kg bag,” Mr Hutchinson said.

The subsidy program managed to get flour prices down from as high as Sh153 at the start of the year to Sh130 but has slowly been creeping back up.

According to the CMA, millers have also been unable to compete with the prevailing market prices of maize flour, forcing a number to scale back on production.

The government, through the National Treasury, in March allowed for the entry of duty free maize into the country to ease prices.

Mr Hutchinson said the first maize import from Mexico is expected in the country this week, but could take longer to get the maize to millers with millers expecting a drop in prices in three months time.

“It will take around 10 days from the first day of discharge to collect the entire cargo from Grain Bulk Handlers Limited, after which transfer to the mills takes between 0.5 and 4 days, depending on mill location and the availability of transport. It is important to note that subsequent vessels will wait longer between arrival and berthing; a wait of 3-4 weeks is expected going into the months of June and July,” Mr Hutchison said.

The government on Sunday indicated that the Treasury would re appropriate funds in the supplementary budget to ease the high cost of living.

However the parliament leader of majority Adan Duale appeared to read from a different script accusing millers of failing to pass on benefits of government efforts to consumers.

“The zero rating of maize and wheat flour in the budget in my opinion should have reduced the price of unga from to Sh105 but now one and a half months since the minister effected that measure, the millers have not translated that to reality so I think government must also be very very firm on the millers,” Mr Duale told Citizen Digital.