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Millers blame State for maize flour price hike

By Dominic Omondi | Published Wed, January 10th 2018 at 00:00, Updated January 9th 2018 at 23:37 GMT +3
Unga prices raise on 08/01/2018 (Jenipher Wachie,Standard)

Millers have defended the abrupt rise in the price of maize flour, saying they have run out of stock of cheap maize from the Government.

They explained that by the time the subsidy programme was coming to its tail-end late last year, the Government had drastically reduced the allocation of subsidised maize to them. 

“The Government made sure that allocation of subsidised maize to us was reduced,” Cereal Millers Association Chief Executive Paloma Fernandes told The Standard yesterday.

The association’s chairman Nick Hutchinson at the same time said allocated quota was reduced to ensure that no subsidy maize was left over at the end of the programme.

“There was also an agreement that at the end of the subsidy programme, millers would return any leftover subsidy maize to NCPB (National Cereals and Produce Board),” he said in a separate statement. The gradual phasing out of the subsidised maize was aimed at protecting local farmers whose stock had started trickling into the market.

However, the abrupt manner in which the prices have gone up has raised eyebrows, with farmers reported to be hoarding their produce so as to cash in on the expected shortage. A 2kg packet of maize flour has suddenly more than doubled to Sh150 in some supermarkets, up from Sh90 under the Sh8 billion subsidy programme.

A 1kg packet of the commodity used to make Kenya’s staple meal ugali retailed at Sh47 under the initiative that came about following a prolonged drought that starved the market of the important grain.

On January 3, Agriculture Cabinet Secretary Willy Bett was quoted by a local daily as saying that there was enough subsidised maize to last millers to the middle of this month.

The astronomical rise in the price of unga also comes despite maize from the North Rift starting to hit the market, albeit production from the region, which is Kenya’s bread basket, is expected to decline by 15 per cent following prolonged rainfall that destroyed harvests.

A report in Tuesday’s publication of our sister publication Financial Standard showed that importers might have brought into the country an extra 2.5 million bags of maize between April and September last year.

Not clear

This is more than the five million deficit that the Government had estimated would be covered by the subsidy programme in its first phase which ended on September 30.It is not clear how many bags of the cheap flour was imported under the subsidy programme, but by September 30 last year, figures furnished to Kenya National Bureau of Standards by Kenya Revenue Authority (KRA) showed that 922,338 tonnes of raw maize came into the country. 

This is about 10.2 million bags of both yellow and white-maize.