Market Update 11-21-18
The price of maize across Kenya has increased since the beginning of the month and is currently trading at Sh 2,200 per 90-kilogram in Nairobi and Thika, and at Sh 1,600 per 90-kilogram in Eldoret and Nakuru. While prices have been strengthening recently, it is quite possible to see a reversal as the Kenyan maize harvest reached 40.9 million bags this year, reflecting a twenty percent increase over last year. According to the Strategic Food Reserve Oversight Board (SFROB), last year’s harvest was approximately 34 million bags, thus the increased production broke a trend of decreasing harvests on an annual basis dating back to 2015. Although the increase in production is positive from a food security standpoint and thus decreasing the reliance on maize imports, the increased supply could impact profit realized by farmers.
Maize farmers are avoiding any deliveries made to the National Cereals and Produce Board (NCPB) until a price has been agreed upon. A task force led by Uasin Gishu Governor, Jackson Mandago, and Trans Nzoia Govenor Patrick Khaemba, has been chosen to formulate the price in which the NCPB will buy for the current crop, however just last week the proposed price of Sh 2,300 per 90-kilogram was rejected by the farmers. Farmers from areas such as Uasin Gishu, Trans Nzoia, Nandi and part of the western region counties have pledged that they will only sell their product to the NCPB at Sh 2,300 per 50-kilogram bag, an equivalent of Sh 4,140 per 90-kilogram bag to recoup losses from last season’s harvest.
Earlier this month, Kenya and China have formally signed an agreement allowing Kenya to export various agricultural products to China. According to Nzioka Waita, Chief of Staff to President Uhuru Kenyatta, an agreement on food, plant and animal safety had been reached, thus enabling Kenya to start exporting various fruits, vegetables, flowers and meat. Although China is currently Kenya’s largest trade partner, accounting for about seventeen percent of total trade, Kenya currently operates at a trade deficit with China. The impact of the agreement between the two countries could start to even out the trade balance, and comes at an opportune time while China and The United States are in the middle of a large trade dispute.
The price of maize is slightly stronger compared to two weeks ago, trading at UGX 600 per kilogram in the Kampala area. The price of maize is not expected to rise much higher than current levels as the new harvest is entering the market. Sesame seeds are trading at UGX 4,500 per kilogram, but prices are expected to decrease to circa UGX 3,700 per kilogram. Chia seeds from northern Uganda are also entering the market and are currently priced at UGX 4,400 per kilogram in Kampala. Red kidney beans are currently priced at UGX 1,600 per kilogram as the new harvest is easing pressure on prices. Nambale beans are also entering the market, however much of the crop is reported to have high moisture levels. For any questions regarding drying solutions, please kindly contact the PXAfrica team.
On Monday it was announced by Vincent Ssempijja, the Ugandan minister for Agriculture, Animal Industry and Fisheries, that a large-scale project to boost agricultural efficiency will be put into action. The project is a six-year partnership between the government of Uganda and the World Bank intended to increase production of five crops (maize, beans, cassava, rice and coffee) across forty-two districts in Uganda.
The project will work in two parts, first being an education program focused on training farmers and agricultural input dealers in the use of agricultural chemicals, while the second part will implement an e-voucher program designed to rid the market of fake products. The e-voucher management system will work through an electronic receipt being sent to the consumer when he or she purchases inputs such as a bag of fertilizer or seeds. Due to the electronic record, if the inputs turn out to be fake, the dealer is tied to the transaction and can be punished by deregistration.