Sunday, 12 February 2023

Millers demand yellow maize as shortage bites

 


To address the severe grain scarcity and protect customers from rising flour and other food prices, millers have petitioned the government to enact a number of measures, including permitting yellow maize to be processed for consumption. The government should remove restrictions on cross-border trade, according to the millers, and allow for an unlimited flow of grains into the nation. According to them, the six million bags of white maize now on hand can only be used for two months.

Consumers are having a hard time with rising commodities prices. Should the situation continue, putting these suggestions into practice will help to contain the rising costs of commodities based on wheat and maize, the companies claimed in their plea.

The Kenya Bureau of Standards (Kebs) regulations should be reviewed to permit yellow maize to be used as food, according to the millers, who met with President William Ruto and his deputy Rigathi Gachagua on January 23. This recommendation came after it became clear that importing 10 million bags of white maize would take longer than anticipated due to low stocks on the global market.

Additionally, the businesses urge the government to remove import duties on wheat in an effort to lower consumer costs and harmonize cess and levy requirements across counties. The millers claim that in order to relieve pressure on white maize and lower the price of animal feeds, the duty waiver on yellow maize needs to be extended for another six months.

In their advice to the government, the millers stated that "it is also crucial that the government introduce FX allocations for those in the food industry, as is happening in the petroleum sector." Since it appears that it would take a while until the 10 million bags of imported duty-free grains arrive in the country, maize prices are predicted to stay high.

The millers want to import maize, which will raise the price of flour by Sh6,000 per 90kg bag compared to Sh4,800 on the local market. The 10 million bags of duty-free corn were supposed to be accessible this month, but the Ministry of Agriculture reports that this will not be the case.

Due to logistical issues, such as the delayed choice of the importers, "we expect the duty-free maize to arrive in Kenya early next month," Crop Development Principal Secretary Kello Harsama stated. Between February and August, the ministry permitted importers to bring in 900,000 tonnes of duty-free white maize and 600,000 tonnes of duty-free milled rice.

"This will make it possible for the nation to have enough supplies to last until the following harvest in July or August. White maize and milled rice imported by August 6 will be eligible for the tariff remission, according to a notice from the State Department for Crop Development. Thirty businesses have received government approval to import maize, but none have done so. Other traditional suppliers of maize, such as Zambia, Tanzania, Malawi, Uganda, and Ethiopia don't have any supplies save South Africa.

According to estimates, the nation produces 3.2 million tonnes of maize per year, compared to a consumption of 3.8 million tonnes. Normal imports from East Africa Community (EAC) members are used to close the imbalance. With a 2.4 million tonne yearly need for wheat, the nation imports a lot of its 100,000 tonne annual production.

Kenya imports 60% of its shortfall, primarily from Russia and Ukraine. The supply chain has been hampered by the existing conditions in the two nations. Players in the market have therefore resorted to pricey wheat from the US, Argentina, Australia, and Canada, raising their operational costs, according to the millers.

Prices for 90kg bags of maize increased by 47% from Sh2,850 in 2021 to Sh4,200 in 2022. Persistent drought and fewer visitors from EAC member states were blamed for the problem.

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