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Millers shun State’s cheap maize keeping prices high

Maize millers have only purchased a fifth of cheap grains the government released last week to curb the soaring price of flour that has currently hit a record high.
The National Cereals and Produce Board (NCPB) says millers have purchased 203,000 bags as of Monday out of a million that the state released to supplement the available stocks in the market to cool the runaway price of flour.

The release of the cheaper maize from the board was aimed at curbing runaway flour prices that Sh153, from less than Sh100 a year ago.

NCPB General Manager Cornel Ngelechey says that they expect the number of purchases to go up by the end of the week.

“So far millers have just paid for 203,000 bags but we expect the numbers to go up by the end of the week,” said Mr Ngelechey.

The government is selling a 90 kilogramme bag of maize at Sh3,000 per bag, which is lower than the Sh4,500 that the same quantity retails at in the market after a two kilogramme packet of flour crossed to a historic Sh153.

The high prices of maize, which is the country’s staple, has pushed inflation to 10.28 per cent in March from 9.04 in February.  

Food takes up the largest share (36 per cent) of the basket of goods that is used to calculate inflation, making it the main driver of the cost of living.

Traders are holding stocks of maize that are enough to last the country for one month in anticipation of high future prices, denying the consumers cheap flour by creating an artificial shortage of the produce in the market.

The Food Situation report from the Ministry of Agriculture seen by the Business Daily reveals that traders are in possession of three million bags of maize in their warehouses.

The report further indicates that farmers are holding 5.5 million bags while National Cereals and Produce Board (NCPB) holding 1.3 million bags.

Treasury has ordered importation of duty free maize from Mexico to ease the current shortage. Grain coming in from outside East African Community member states normally attracts a Common External Tariff duty of 50 per cent.

Maize forms 80 per cent of the raw material used in making of flour and the current shortage is what has led to sharp increase on the price of unga.

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