High food prices to persist as fertiliser imports thin out

A variety of maize flour on sale at a supermarket along Langata Road, Nairobi. [Elvis Ogina, Standard]

Kenyans are yet to see the end of high food prices.

This is after new data from the Kenya National Bureau of Statistics (KNBS) showed that the country’s imports of chemical fertilisers in the first three months of this year dropped sharply by 64 per cent to 91,442.4 tonnes.

This means that the shortage of maize, which has led to a two-kilogramme packet of maize-flour retailing at a record Sh250, will still be prevalent when the harvests for the long rains hit the market.  

The volume is the lowest first-quarter import of chemical fertilisers since KNBS started compiling the Quarterly Balance of Payment report.

In the first quarter of 2021, traders shipped into the country 253,726.70 tonnes of chemical fertilisers, mainly from countries such as Saudi Arabia and Russia.

Timothy Njagi, a research fellow at public policy think tank Tegemeo Institute, said the drop was due to the high price of the input, which discouraged a lot of traders from buying it last year for the period beginning late April to early June.

“It is absurd that the Ministry of Agriculture is optimistic about the harvests for this season,” he said, noting that a lot of farmers either reduced the acreage they put under crops such as maize due to the poor rains or used little, or no fertiliser, due to its high cost.

The imported chemical fertilisers in the first quarter of 2022 were valued at Sh8.3 billion, a drop from Sh10.5 billion in a corresponding quarter last year.   

Most traders start importing chemical fertilisers around October to December in preparation for the long rains.

However, most of them reduced on their orders when they realised that farmers were not buying the input fearing that overstaying with expensive fertiliser for the short rains would see them burn their fingers should the prices come down, said Dr Njagi.  

A 50kg bag of planting fertiliser now costs around Sh6,500, more than what it cost for the better part of last year.

Agriculture experts project this to keep rising and hit a high of Sh7,000, with the weakening of the Shilling adding to the crisis. 

Prices of fertiliser started rising last year due to surging energy costs, supply constraints and trade policies, said the World Bank in an article.

A packet of maize flour was retailing at Sh80, but now it’s at more than Sh200. [iStockphoto]

But the Russia-Ukraine war that started in February aggravated the crisis, with Russia, a major source of Kenya’s fertiliser, being slapped with sanctions by the West.

Before the conflict, China and Russia - two of the world’s largest producers of fertiliser—had been hoarding the critical input.

The war is already hurting the flow of chemical and nitrogenous fertiliser from Russia, one of the main sources of Kenya’s fertiliser besides Saudi Arabia and Morocco.

This is likely to get worse especially if Russian forces advance into Kyiv, the Ukraine capital.

Eastern Africa Grain Council Chief Executive Gerald Masila said that with the war in Ukraine not about to end soon and the expected poor harvests this season due to expensive fertiliser that saw some large-scale farmers fail to grow maize, things will keep getting worse.

Due to the high cost of fertiliser, the government has launched a fertiliser subsidy programme and has since released Sh5.8 billion for this input and others in what is aimed at improving the yields and stabilising prices.

Another Sh3.5 billion has been released to the tea and sugar sectors to help boost production and pay farmers.

The recent decision to suspend levies and import duty on maize, millers say, is insignificant given the multiple charges they are subjected to when getting maize either from Tanzania or through the country from Zambia.

Transport costs, they say, have also spiked.

As for getting maize from places such as Mexico, Romania and Serbia, which have non-GMO (genetically modified organisms), the time before August is too short, millers say.

They say it takes time to aggregate, load (between one and two months), sailing (60 days) and two weeks to offload.

Fruit vendor at a market in Eldoret, Uasin Gishu County. [Peter Ochieng, Standard]

“The gazette notice gave and removed in the same breath,” said Mr Masila, adding that no one can take the risk of using a loan of Sh2.2 billion to bring a ship-load of maize only to land in Kenya and be slapped with a 50 per cent duty on the consignment.

The decision to roll back the stringent containment measures that had been implemented to curb the spread of Covid-19 helped the economy to grow by 6.8 per cent in the first quarter of 2022.

However, the agricultural sector continued to underperform due to poor rains and the high cost of inputs.

A reduction in the production of maize saw the quantity of imports more than triple in the first three months of the year.