Shock for maize farmers as market flooded with imports

Local farmers might be in for a rude shock after millers brought into the country an extra eight million bags of cheap maize.

This also brings into question the Government’s maize subsidy programme, in which the State was to spend about Sh6.5 billion but might have spent at least Sh17 billion.

After a drought that depressed maize harvest and pushed up the price of a 2kg flour packet to Sh200, Mexico, Zambia, South Africa, Malawi and Ethiopia were identified as potential sources.

Shortfall

A shortfall of five million bags was projected until the next harvest.

“The year under review saw the introduction of duty-free imports of maize by flour millers,” said the Kenya National Bureau of Statistics in its the 2018 Economic Survey.

“This resulted to a 9.8 per cent increase in production of maize flour to 669.4 thousand tonnes in 2017.”

Farmers should now expect lower prices for their commodity after the latest data showed that the market was flooded with cheap imported maize.

Over 51 million bags of cheap maize were supplied to the market in 2017 as importers took advantage of the Government’s decision to open its borders under the maize subsidy programme to sneak into the country the extra maize.

About 42 million bags of maize are supplied into the domestic market annually and go into food, animal feeds, processed food, waste, seed and other utilities.

However, data from the Kenya National Bureau of Statistics shows that Kenya imported a record 14 million bags of duty-free maize from Mexico, South Africa, Uganda, Ukraine and Russia, a situation that saw supply of this critical foodstuff surpass domestic consumption.

Farmers might be looking at Government to mop up their extra maize, but there is only as much the Strategic Grain Reserve can take.

Already, Government silos are full, overrun after the State announced last November that it would buy 2.4 million bags of maize at Sh3,200.

And in what is a clear indication of a flooded market, the Government, through the National Cereals and Produce Board (NCPB), last week announced that it was selling about 653,496 bags to registered millers at Sh2,300 per bag, in what it described as a “grain refreshing exercise.”

Reduced production

After a debilitated drought that reduced the production of maize and pushed up the prices of the commodity, the Government removed the 50 per cent duty charged on maize imported from outside the East African market.

Moreover, after buying the maize from importers at Sh3,600 per bag it sold it to millers at a subsidized price of Sh2,300.

Imports from Mexico alone were valued at a staggering Sh19.1 billion. And with importers getting a 90-kilogramme at Sh2,400, the country imported about eight million bags of non-GMO white maize from the North American country.

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