The National Cereals and Produce Board (NCPB) has cut the price of maize to Ksh2,300 and released 2.4 million bags from the strategic food reserve to check the runaway flour prices. The NCPB has reduced the price a 90-kilogramme bag of maize from Ksh2,800 to below the market cost of Ksh2,900.
The sale will be restricted to maize millers and public institutions to lock out middlemen seeking to profit from the sale of the grains that the government had bought at between Ksh2,800 and Ksh3,000 from farmers.
The sale of the 2.4 million bags will be the biggest release of grains from the reserve and the NCPB said it would also help empty their silos ahead of the harvest season that starts this month. Maize prices have increased from Ksh2,200 in February, pushing flour prices to a 13-month high, exerting pressure on households that depend on the grain as a major source of food.
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Kenya National Bureau of Statistics data indicates that the price of a two-kilogramme packet rose to an average of Ksh115 last month, up from ksh112 and Ksh110 in April, on rising maize costs. Flour prices last went above Ksh115 in June.
“The prices of maize have been high in the recent days and our aim of selling this maize to millers at a lower cost is to check high prices of maize flour,” acting Agriculture secretary Adan Mohamed told a press briefing in Nairobi on Wednesday.
He said they expect the cost of the two-kilogramme packet of maize flour to drop below Sh100 in the coming days on increased supplies. Maize prices have a big effect on inflation in Kenya’s economy because it is the staple food and thus accounts for a significant share of poor households’ budget. Inflation stood at 5.84% last month, down from 6.62% in July.
Currently, the NCPB is holding 4.2 million bags of maize in its depots and earlier efforts to sell the stocks at Ksh2,800 to millers hit a snag. Millers argue that dwindling maize reserves are to blame for the high cost of flour, even as they shun the stocks that the NCPB had allocated them over price and quality concerns.
The millers are currently relying on stocks from Tanzania and Uganda that land in Nairobi at Kh2,800, the same price that the state was offering them. NCPB managing director Newton Terer said the sale from the strategic reserve aims to create space in the depots. “We want to create space for oncoming grain as well as check on the skyrocketing prices of maize flour,” he said.
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