Maize flour prices are expected to remain high in Kenya due to the country’s inability to obtain affordable maize.
Although a duty waiver has been in effect since February, the Port of Mombasa has only received two shipments of white maize so far.
The Ministry of Agriculture is in negotiations with traders to reassess the KES 4,200 per 90-kilo bag that was set by the government as the landing price for maize importers under a duty waiver.
Agriculture Principal Secretary Harsame Kello has stated that traders are finding it challenging to obtain inexpensive products due to stiff competition from other African countries like South Sudan, which is offering higher prices.
In February, the government signed a memorandum of understanding with traders agreeing that the grain would land in Kenya at KES 4,200 to influence the price of flour locally.
However, according to Mr Kello, importers have been unable to meet the market’s price demands due to a scarcity of the commodity in the global market, resulting in negotiations for a new price.
Millers declined to import due to the requirement to commit to the landing price, citing the difficulty in obtaining the commodity at that price due to a scarcity of non-genetically modified products and a weakening shilling.
With a tonne of it selling for $420 (KES 55,440) on the global market, which equates to KES 5,000 for a 90-kilo bag upon arrival in the country, traders are faced with a dilemma regarding whether or not to import.
This is because domestically, a bag of maize is currently priced at KES 6,000. When logistics expenses such as handling and transportation are considered, the imported maize will arrive in Nairobi at almost the same cost as the local product.
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