The Ministry of Agriculture in Kenya projects a surplus of 12 million bags of maize by the end of August which is expected to lower the prices for millers and in turn the price for maize flour.
Food inflation in Kenya is at a 14 month high of 8.8% as higher prices in cooking oils, beef and bread have been a result of disruptions in production due to global lockdowns in many producing countries.
Due to the lack of quality maize in the Kenyan market, a 2 kg pack of flour is now retailing above KES 100 compared to the average of KES 90 in May this year.
Kenya has approved the use of genetically modified (GMO) cassava after a period of 5 years of research was completed and given the go-ahead by the National Biosafety Authority (NBA) as reported in The Business Daily.
East Africa Update
Flour Prices Fall On Reduced Cost Of Maize Grain
As the maize price in Kenya continues to fall, the price of maize flour has also seen a reduction at shelves with a 2kg packet now quoted at KES 106. Millers are now receiving maize at KES 2,700 per 90 kg bag compared to KES 2,800 per 90 kg bag in the previous two months but millers are still not receiving sufficient supply according to The Business Daily. More stocks are expected to be made available from next month from a short crop in the South Rift and also the new crop coming in from Uganda.
Bread Price To Jump KES 6 On Tax Plan
As the Kenyan government is ready to implement a 16% VAT on bread, bakers have signaled a rise in a loaf by KES 6 as this would increase the cost of production and leave companies no choice but to transfer this extra cost onto the consumer.
Millers in Kenya have seen a shortage of maize in the market due to local farmers holding onto their stocks in the hope of a better price for their grain. A number of millers have been buying maize at between KES 2,800 and 3,000 per 90 kg bag compared to KES 2,000 previously as report in The Business Daily
The cost of importing goods into Kenya via the sea will see a 20% rise in freight costs as the shortage of shipping containers in China has disrupted global trade as the freight rates for a 40ft container have gone up to almost $6,000 compared to $4,000 in March according to The Business Daily.
The Cereal Millers Association (CMA) in Kenya has lobbied the government to start issuing certificates of conformity to allow the importation of maize grain from Uganda and Tanzania to avert a possible shortage in the country as prices remain high.
Traders are still facing challenges with importing maize into Kenya after the Agriculture Ministry confirmed that most have failed to conform with the new guidelines that include aflatoxin tests allowing maximum 10 parts per billion, registration of all traders and issuing details of the warehouse of where the grains were held.