Africa Newsletter 12-11-20

East Africa Update

Kenya And UK Sign Trade Deal

The Kenya and UK governments have formally signed a trade agreement that will see Kenyan exporters of agricultural products including flowers and fresh vegetables continue to access the UK market under a duty-free, quota-free arrangement similar to the arrangement that has been in place with the UK’s membership of the European Union.

The East African reports on how the decision to form a bilateral agreement with Kenya instead of the entire East Africa Community has been forced by the elections in Uganda and Tanzania being a priority and Burundi and South Sudan not attending meetings for the talks. This will leave the window still open for the rest of the EAC members in 2021.

The UK has been one of Kenya’s top export destinations for products averaging KES 40 billion since 2015 in value that includes coffee, tea, edible vegetables, cut flowers, and fruit. Of the goods sold to the European Union, the UK purchased close to 30% while the UK has been selling approximately KES 35 billion of goods to Kenya per year.

Kenya Market Update

Kenyan maize prices remain at the KES 2,500 per 90kg level as the expected demand before the festive season has not brought the usual fanfare. The price is expected to remain steady over the next few weeks and the new regulations regarding the aflatoxin levels for Ugandan and other origin maize comes into force. Soybeans remain at KES 47 per kg in the Nairobi area.

Uganda Market Update

Some of the maize growing areas are seeing the beginning of the early harvest but most of the grain contains high moisture for the market ranging 17% and so the drying period will start and last for another 2 to 3 weeks. The maize price is currently at UGX 750 per kg in the Kampala area but the good quality old stock is trading above UGX 800 per kg. Soybeans remain at UGX 1,650 per kg in Kampala while more sesame seeds are entering the market at UGX 3,500 per kg.

Animal Feed Price Up On Weak Shilling, Costly Supplements

The Kenyan market has seen an increase of animal feed by as much as KES 200 across the different forms of feed as the supplements have increased in price as well as a weak shilling. Supplements include soybean meal and sunflower cake. Both of these are usually imported for origins including Malawi, Zambia, and Uganda for soya and Tanzania for sunflower cake.

The price of soymeal has increased from KES 53 per kg to KES 65 per kg as the sunflower cake has gone up from KES 25 per kg to KES 30 per kg. According to Business Daily, the Chairman of the Association of the Kenya Animal Feeds Manufacturers says that the rising cost of the supplements will likely continue into February 2021 and the price of chicken and eggs will also see an increase and a transfer to the consumer.

Ugandan Manufacturers Issue Ultimatum, Demand Retaliation Against Kenya

Ugandan manufacturers, supported by the Uganda Manufacturers Association (UMA), have given their government until Christmas to come up with a solution on the current blocking of Ugandan products into Kenya.

The Monitor looks at how Kenyan authorities have been blocking the entry of Ugandan products into the country and causing friction between the two neighboring country’s that are both members of the East African Community and its Common Market commitments for free trade in the bloc.

Products that include milk, sugar, poultry, and beef products have been rejected with claims that are not well explained to the exporters. The government of Uganda maintains its position that dialogue is the solution and not retaliation even after Tanzania also introduced a ban on Ugandan origin sugar from its market and Kenya imposing an official ban on milk products from Uganda.

Find our report Hot Commodities at panxchange.com/hot-commodities