Pressure is mounting on Kenya to review non-tariff barriers involving Ugandan milk products entering the local market.
Sources in the government have confided that the Kenya Dairy Board (KDB) is committed to resolving the matter in the next few days.
Uganda dairy exporters have raised the alarm over a move by the Kenyan dairy regulator to stop issuing permits for Ugandan dairy products in the KenTrade system from last March. The suspension of the issuance of permits was implemented despite the State Department for Livestock Development rescinding a notice banning dairy imports issued by KDB.
One of Uganda’s largest processors, Brookside, trading under the Fresh Dairy brand, whose parent company is also the largest industry operator in Kenya, said it had not exported a single litre of milk to Kenya since the blockade began.
“The rising stockpiles of milk have impacted farm-gate prices of milk, which have dropped exponentially,” Brookside Uganda General Manager Benson Mwangi told journalists in Kampala. Uganda’s industry regulator, the Dairy Development Authority (DDA), says Kenyan authorities are limiting the number of export permits for powdered milk from the country.
DDA Executive Director Samson Akankiza told journalists that Nairobi is only issuing about 20 per cent of entry papers to exporters of its powdered milk. Sources within the industry in Kenya are, however, optimistic that the matter of export permits for Uganda firms will be amicably addressed in the next few days. “There is a lot going on within both the diplomatic and trade circles. Very soon, this matter will be amicably resolved as Kenya also needs its neighbours in its trade agenda,” a source privy to the matter said on condition of anonymity.
Ruiru-based Brookside declined to speak on the matter when pressed for comment by Financial Standard, with the company’s communications manager Wilson Okong’o referring us to Mr Mwangi, the general manager of their Uganda operations, who could not be reached on the phone. The trade row could have long-running implications for trade across the region as the restrictions go against trade protocols under the East African Community (EAC). In March, Kenya made a U-turn on the recent ban on powdered milk imports, potentially avoiding a costly trade war with neighbouring countries.
A public communique from the Kenyan Agriculture Ministry to all importers of dairy produce dated March 14 said the directive had been suspended.
The ban had not named any specific country, but Ugandan manufacturers protested the move and urged their government to take retaliatory measures. They argued the move was against the spirit of the East African Community (EAC) integration and trade protocols.
Uganda’s first Deputy Prime Minister and Minister for EAC Affairs had said she had contacted her Kenyan counterpart, Rebecca Miano. The Uganda Manufacturers Association and the Private Sector Foundation Uganda had appealed to their government to engage Kenya over the ban, saying it was against the spirit of the EAC. Uganda is Kenya’s biggest trading partner in EAC after Tanzania and Rwanda.