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Price of unga set to hit Sh150 as State dithers on imports

The price of unga could hit Sh150 per 2kg bag in the coming weeks, if the steady increase in the cost of maize is anything to go by.

This is after the government ignored the findings of a think tank that recommended early importation of maize to bridge the deficit.

Last October, Tegemeo Institute of Agriculture — a research wing of Egerton University, Njoro, — forewarned the government of a looming shortage of the produce, calling for importation of sufficient maize.

The research, released by Mr Francis Karin, asked the government to scout outside Africa for white non-GMO maize, given that most countries on the continent from which Kenya imports the produce were facing deficits. 

“There is a need to monitor closely the food situation in Kenya and prepare early for a possible maize shortage, taking into account the lag-time in procurement,” Tegemeo said in the findings.

“An early consideration of potential sources of such imports is critical given the drought ravaging the region and the export bans in some food-surplus countries,” the findings said.

The government is considering importing maize from Mexico, but is yet to make the move. A 90kg bag of maize has now hit Sh3,700, from Sh3,200 last month.

Maize from Mexico could also take longer to get to the country because East African Community member countries have a common external tariff of 50 per cent that is levied on grain from outside the trade bloc.

A single member state cannot reduce/remove the duty at its discretion.

The ministries of Devolution, Agriculture and Treasury had jointly formed a team to report on the planned importation. The team was to give the report to President Uhuru Kenyatta on January 27.

Millers say the lag-time for the produce to arrive in Kenya is 45 days, adding that the earlier the government approves the import the better for consumers.

The chairman of the Cereal Millers Association, Mr Nick Hutchinson, said farmers and traders were demanding higher prices for maize, pushing up the cost of flour.

“There are good stocks of maize in the country, but the price the owners are asking for is way too high, pushing up consumer prices,” said Mr Hutchinson.

He said the longer the government takes to approve imports, the more expensive it would be to procure maize locally.

Kenya normally imports grain from Uganda and Tanzania to bridge its production shortfall. Tanzania has restricted export of maize while Uganda registered a lower output than usual last season. The little that is available in the region is also finding its way to South Sudan, where it is fetching better returns.

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

Inflation hit an 11-month high in January, pushed up by higher food prices. The latest data from the Kenya National Bureau of Statistics show inflation stood at 6.99 per cent, up from 6.35 per cent in December.

At 6.99 per cent, January’s inflation is the highest since February last year, and just a few points shy of the Central Bank of Kenya’s preferred ceiling of 7.5 per cent.

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