Africa Newsletter 02-19-21

East Africa Update

NCPB Buys More Maize After Price Review

The National Cereal and Produce Board of Kenya have started buying maize grain at KES 2,700 per 90 kg bag from growers as an attempt to receive more grain that farmers were selling to millers and traders that offered a higher price.

According to The Business Daily, the initial price of KES 2,500 per 90 kg did not appeal to many growers and that led to lower stocks than anticipated by the government body but with the new price point they have now purchased 200,000 bags and target to buy a further 800,000 bags.

The influx of maize from Tanzania and Uganda has seen more competition with the local crop and this has seen other buyers indicating KES 2,800 per 90 kg bags even as the new labs have been set up to manage the aflatoxin levels from the imported grain.

Kenya Market Update

With the NCPB increasing their maize prices to KES 2,700 per 90kg bag, millers are also increasing their prices to KES 2,800 per 90 kg bag and some even KES 2,900 per 90 kg bag as the demand increases for the grain.

Soybeans are now seeing bids coming in at KES 60 per kg in Nairobi due to the increase in prices in the regional origins of Ethiopia and Uganda. Animal feed processors are even bidding for soymeal in order to meet their feed requirements.

Uganda Market Update

Maize is trading at UGX 680 per kg in Kampala with the price now settling just below UGX 700 per kg in the surrounding areas of the capital as most of the crop is now entering the market and a number of smaller traders crossing the border into Kenya with their grain.

Soybeans have seen an increase in the market and are now currently trading at UGX 2,200 per kg in Kampala as this is partly due to the small crop this season. Sesame seeds have also seen a steady increase in price as the pre-cleaned oilseed is trading at UGX 3,900 per kg for deliveries to Kampala. Maize bran remains steady at UGX 500 per kg.

Kenya, Uganda Renew Milk Export Dispute As Ties Sour

The cross border trade disputes between Kenya and Uganda continue in regards to milk products and this could end up in the East African Court of Justice as the Ugandan legislators have advised authorities to take the necessary steps to have this matter resolved.

Kenya has blocked the import of milk products from Uganda in the past year with hundreds of tons being confiscated and the Ministry of Agriculture has announced even tighter measures of these imports as reported in The East African. Kenyan farmers have made official complaints regarding the cheap influx of Ugandan milk products that resulted in the price of a liter of milk reaching KES 19 but with these import restrictions prices have now increased to KES 35 per liter.

Farmers In Rwanda Up In Arms Against New Directives

A new directive by the government by which only buyers with authorization from the Rwanda Development Board has not been welcomed by farmers who argue that many of the local traders are key players in the supply chain.

Rwanda Today reports on this new development that could see many farmers see delays in payments of their crops and bureaucratic processes into the marketplace that would mainly benefit the large and established farmer.

Farmer’s associations’ groups argue that up to 60% of farmers are supported by local traders who support them with funds for inputs and other daily expenses in exchange for the product and by limiting their access to the farmers this could badly affect the livelihoods and production of the farmers.

Kenya Tipped To Reap Big From Africa Free Trade Pact

According to the World Bank, Kenya will be among the top beneficiaries of the new African Continental Free Trade Area (AfCFTA) with the pact expected to boost Africa’s income by $450 billion by 2035, a 7% gain, while adding $76 billion to the overall global income and an increase to Africa’s exports by $560 billion as reported in The Nation.

The World Bank has identified Kenya’s developed industrial potential and human capital, which will give the country an edge over its East African neighbours, with trade barriers and low trade costs. The World Bank sees the AfCFTA income coming from a cut in red tape and customs procedures but also improves diversification by increasing demand for manufactured goods for export.

Kenya is also a benefactor of the Africa Growth and Opportunity Act (AGOA) that grants 40 African countries quota and duty free access to the United States market with more than 6,000 products. The total United States-Kenya trade was KES 118 billion in 2019, up by 4.9% from 2018.

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