Africa Newsletter 05-03-19

Kenya

The maize prices have steadily gone up to an average of Kshs 3,300 per 90 Kg bag. Government set to start releasing maize to millers from the strategic reserve. The millers want the government to move with speed and release stocks of maize from the Strategic Food Reserves at Sh2,500 in order to cool the runaway cost of the staple.

The rains have set in most parts of the country with most parts receiving above average rainfall. Kenya is scouting for local and foreign investors to raise Sh2 billion for an agricultural produce exchange. The Kenya National Multi Commodities Exchange (Komex) will operate warehouses where farmers will deposit produce for storage pending a decision to sell when prices improve. In a media notice, Trade PS Chris Kiptoo said the exchange is seeking Sh2 billion for the planned initial investment with investors expected to sink in a minimum of Sh5 million.

The value of imports from Uganda fell by more than half in the first two months of the year, reflecting reduced orders for grains such as maize.

Uganda

Maize is trading at UGX 1,250 per kg in the Greater Kampala area as stocks begin to reduce in the capital. In Mubende maize is trading at UGX 1,180 per kg as some growers in the disrict do not expect a big crop in June and July due to the late rains.

Soybeans continues trading at a high price due to its scarcity and demand. In Kampala prices have been quoted circa UGX 2,800 per kg. The demand for protein will continue well into the new harvest as a number of growers switched from maize to soybeans.

UK injects Shs577.6b to boost agriculture

The United Kingdom (UK) has injected about Shs577.6 billion into the country’s agriculture sector to help boost crop production and post-harvest handling. The joint venture deal, signed between the Agriculture ministry and two UK firms Alvan Blanch Development Company, and Colas Ltd, seeks to manufacture, supply, and install multiple post-harvest processing systems across the country. This plan aims to improve access to agricultural markets and value addition for the 12 priority commodities, including maize, beans, rice, tea, coffee, and bananas, plus four other strategic commodities, namely oil palm, oil seeds, cocoa, and cotton.

Region braces for tough times as food crisis is forecast

East African countries are facing a food supply crisis, which is bound to increase the cost of living and push up governments’ budget deficits this year. Much of the region has gone through a dry spell after the delay of the long rains (March-May), with poor harvests forecast. While the region’s average cost of living remained relatively unchanged during the three months to March, inadequate food supply and rising oil prices may lead to higher inflation in the coming months. Uganda usually has two maize harvests each year, and Tanzania’s May and August harvests have played a major role in stabilizing the prices of the commodity in the region.

Adverse weather and politics batter Uganda coffee exports 

Uganda recorded a sharp drop in coffee exports last year, losing over $100 million. Officials are blaming the drop on adverse weather. Coffee exports dropped from 4.76 million bags in 2017 to 4.1 million bags in 2018, jeopardizing an ambitious plan to increase production to at least 20 million bags in seven years. The government says it is seeking Ush200 billion ($52 million) to counter the effects of drought through irrigation.