Cost of ugali may rise again as traders start to import maize

A protestor holds a plate of ugali on June 11,  2015, outside parliament buildings. [File, Standard]

Kenya has begun importing maize to address a biting shortage that has left 3.1 million people in arid and semi-arid lands without enough food.

Most of the maize consignment is coming through the border of Busia, as the country combs for the little duty-free, non-GMO (genetically modified organism) maize still available in Uganda.

Uganda, just like Kenya, is a member of the East African Community (EAC), a free trade area.   

There is also some maize coming into the country, through the Namanga border with Tanzania.

Abubakar Ochieng, a cereal trader at Busia town, counted over 20 light trucks of maize coming into Kenya. Most of the maize, he told Sunday Standard, came from the Cereal Market in Busia, Uganda, and some from as far as Kampala.

That was not the case at the beginning of the year, said Ochieng. “In fact, maize used to leave Kenya for Uganda,” added the trader.  

For Namanga, five trucks came in on Thursday and only two by Friday evening. The reduced flow of maize through the border of Namanga is due to the decision by Tanzania, like many other countries, to restrict the export of staples in a bid to first satisfy the local demand.

South Africa, which is the only option, some experts say, is left on the table for Kenya (but which, unfortunately, produces mostly GMO maize), was also a source of some maize products in the first three months of the year.

Data from the South African tax authority shows that Kenya imported by seas some 24,000 kilogrammes of maize flour from South Africa. The maize flour, valued at around Sh1.1 million was mostly used to manufacture animal feeds. ​

Kenya expects to import up to 540,000 tonnes of maize this year, the highest since 2017 when the country had a major maize shortage that saw it cross the high seas to Mexico for this cereal.

A number of factors, including drought, expensive inputs such as fertiliser, and invasion of fall armyworms have combined to reduce the yield of maize which has in turn led to a spike in the price of this cereal. 

Retail prices of a two-kilogramme packet of maize flour have been rising from an average of Sh126.3 in January to Sh147.6, data from the Kenya National Bureau of Statistics (KNBS) shows.

 The median price for a two-packet of maize flour, which is used to prepare ugali, a staple dish for most Kenyan households, was Sh150 compared to less than Sh120 a year ago.

A spot check of the prices of basic commodities in retail stores in Nairobi by Sunday  Standard found that in some supermarkets, a two-kilogramme packet of maize flour was retailing at Sh167 last week.

Global factors such as the Russia-Ukraine conflict and the Covid-19 pandemic have also contributed to the crisis, with the country struggling to get maize in its traditional markets such as Uganda where large-scale farmers did not plant maize due to expensive fertiliser.

Poor rains saw the agricultural sector contract last year, with the 2021 production estimates indicating that poor rains reduced maize output by three per cent, wheat by 28 per cent, and beans by 13 per cent below 2020 levels.

This has seen Kenya desperately hunt for maize from all corners of the world after the National Treasury issued a notice that waived the duty for importation of white maize from outside of the East African Community. 

But even after the waiver, with traders, expected to only import 100 per cent non-GMO maize, finding this critical cereal has not been easy.

Earlier, Agriculture CS Peter Munya stated that the imports of about 540,000 tonnes would be restricted to what is needed by those who would be licensed to avoid shipping in excessive stocks by unscrupulous traders.

The target of 2022 is the highest since 2017 when the country, confronted by yet another drought, bought 1.3 million tonnes of maize mostly from Mexico under a controversial subsidy programme.

The Ministry of Agriculture estimates in the key staple food balance sheet that the country’s maize consumption per month is 4.25 million bags.

The 4.25 million bags demanded monthly means the annual demand is 51 million bags. This means last year’s production was only enough for about 9.5 months.

Kipkorir Arap Menjo, a director at Kenya Farmers Association, said he has no problem with maize being imported as long as traders do not use the opportunity to ship in excess.

“They should not import excess, because this can distort the market,” said Menjo.

Harvests from South Rift are expected to the market around August and September while those from North Rift will land the period between November and December.

The yield of maize in the so-called grain belt has been low due to unpredictable rains.

The long rains delayed, hitting farmers from Trans Nzoia, Uasin Gishu, and Nandi hard.

“Importation is not a problem. The harvest for last year was not good,” he added.

Mexico imports

In 2017, when the country also experienced a shortage of maize due to the drought in the region, with Uganda and Tanzania also running out of grain, traders went as far as Mexico to ship in close to 43 per cent of its maize.

Other areas that Kenya combed for maize included South Africa and Ethiopia.

Now, other than South Africa—whose 80 per cent of the white maize is genetically modified and thus not allowed in the country—all the other countries do not seem to have surplus maize to export. And those with a surplus are under pressure from their citizens to cater to their domestic needs first.

“It is not only Kenya that is looking for maize,” said Dr Timothy Njagi, a research fellow at Tegemeo Institute, a public policy think tank.

Njagi said the requirement that only non-genetically modified maize be imported is very strict and for countries like Malawi and Zambia that produce non-GMO maize farmers sold their stocks before they are even harvested. India is the main competitor for non-GMO maize.

The highly charged political season has not made matters any better, with a lot of government officials out on the campaign trail.

Suspecting that some of the farmers might be hoarding maize to make a killing, stakeholders of feed manufacturers, millers, and agro-processors, in a joint statement, are now pushing the government to encourage them to release the maize stock to millers at the prevailing price, around Sh4,200.

However, farmers insist they are not hoarding any maize, with many of them saying they already sold their produce to cater to urgent needs such as school fees.

The traders are also headed on a collision path with farmers after they recommended that the government gives importers an extended window of 12 months to bring in enough maize to stabilise the prices, instead of the three months that had been given by the National Treasury in the Gazette notice.

Farmers are expected to harvest their maize in the next three months, and although productivity might not be enough, there are fears that more imports might flood the market, leaving local producers who have used costly fertiliser disadvantaged.

Even critical is that the traders want the government to negotiate with the governments of Tanzania and Zambia to allow for the importation of six million bags of maize, even as it supports the transportation of maize from these countries.

“This is because of the high cost of transporting produce from the neighbouring countries, which ultimately drives up the price of finished products,” read the statement released on May 25.

They said transport costs from Lusaka to Nairobi have gone up from Sh14,000 ($120) per tonne to Sh21,700 ($185). It is the same with higher freight charges that have been occasioned by the Covid-19 pandemic and worsened by the Russia-Ukraine conflict.

The government has softened its tough conditions, allowing 26 companies to import yellow maize which is 99.1 per cent non-GMO.

In a Gazette notice exempting duty on imported raw materials used to manufacture animal and chicken feed, Treasury CS Ukur Yatani backtracked on an earlier notice indicating that government would only allow 100 per cent non-GMO yellow maize into the country.

These companies will be allowed to import 341,950 tonnes of yellow maize to be used for the manufacture of animal feeds in what is aimed at reducing pressure on white maize.

For countries that Kenya has identified as having an over-supply like Zambia and Tanzania, pressure is mounting for them to prohibit the export of food to ensure supply for domestic consumption.

Zambia factor

However, the government of Zambia announced that maize production for the 2021/22 season is expected to drop by over a fifth from 3.6 million tonnes to 2.08 million tonnes.

The government, however, insists that it has a surplus stock of maize—about 1.2 million tonnes— for the 2022/23 season, which it can export to needy countries like Kenya, according to a statement by Zambia’s Minister of Agriculture Reuben Mtolo on May 12.

Already, there is pressure from the citizens of Zambia to join other food exporters around the world by prohibiting the selling of maize to outsiders.

Preliminary estimates by the United States Department of Agriculture are that Tanzania’s maize exports could decline from 800,000 tonnes in the 2021/22 marketing year to 100,000 tonnes in the 2022/23 marketing year.

Such a drop would leave very little for Kenya’s maize needs.