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Kenya to import 540,000 tonnes of maize to avert looming shortage

BUSINESS
By Patrick Alushula | May 20th 2022 | 3 min read
By Patrick Alushula | May 20th 2022
BUSINESS
The government said recently that some farmers were hoarding their produce to push up the prices. [File, Standard]

Kenya has opened a three-month window to import up to 540,000 metric tonnes of white maize to avert shortage even as prices of flour go through the roof.

National Treasury CS Ukur Yatani has okayed the move that targets to allow maize imports from outside the East African Community to offer reprieve to consumers.

“In consequence of the notification of an impending maize crisis in the country by the Cabinet Secretary for Agriculture, Livestock Fisheries and Co-operatives, a waiver of import duty has been granted for the importation of not more than 540,000 metric tonnes of white non-genetically-modified organism (GMO) maize grain,” said Mr Yatani in a Friday gazette notice.

“The waiver of import duty shall apply to white non-GMO maize imported into Kenya on or before August 6, 2022.”

Agriculture CS Peter Munya had said on Monday the imports would be restricted to what is needed by those who would be licensed to avoid shipping in excessive stocks by unscrupulous traders.

The price of a 90-kilo bag of maize has risen from about Sh2,800 in December to about Sh4,500 in March on reduced supply.

Duty-free imports are expected to take pressure off the price given that the harvest season is about three months away.

The government said recently that some farmers were hoarding their produce to push up the prices further but the duty-free window looks set to force them to release their stock now.

Kenya National Bureau of Statistics (KNBS) data shows maize production in the country declined by 12.8 per cent from 42.1 million bags in 2020 to 36.7 million bags last year on the back of erratic rains.

The decline in local production saw the volume of imported maize nearly doubled from 273,500 metric tonnes in 2020 to 486,500 thousand metric tonnes in 2021.

KNBS notes that the value of marketed maize decreased by 16.7 per cent from Sh8.2 billion in 2020 to Sh6.9 billion in 2021 as a result of lower maize production in the review period.

Treasury’s window for the importation of up to 540,000 tonnes, therefore, looks set to set a new record for dependence on produce from outside the country in a single year since 2017.

Kenya 2017 imported 1.33 million tonnes of maize which turned out to be a controversial window as local farmers alleged sabotage by forces which wanted to profit by collapsing the local production.

A tonne of imported maize was costing Kenya Sh28,260 last year, a rise from Sh27,279 in the previous year and was the highest since 2017 when it was Sh30,321.

A waiver on maize imports adds to the series of interventions by the State as it battles the rising cost of living being witnessed in the country.

The State has been softening the inflation’s pain with interventions on electricity and fuel as well as animal and chicken feeds.

Official data shows the cost of living hit a seven-month high of 6.74 per cent in April, from 5.6 per cent in March, putting a strain on household budgets.

Prices of items like cooking oil, cooking gas, maize flour, rice and fuel have all been rising in an environment where earnings have failed to keep up with inflation and therefore earning people inflation-adjusted pay cuts.

Eyes are now on Parliament ahead of the debate on the Finance Bill 2022 which is seeking to introduce or raise taxes on different commodities including ice cream, juice, bottled drinking water, jewellery, cosmetics and beauty products.

Russia’s invasion of Ukraine on February 24 has complicated the recovery of economies from supply chain disruptions that had been triggered by Covid-19 in 2020.

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