Market forces now to determine Maize flour prices as government subsidy ends

CS Agriculture, Livestock and Fisheries Willy Bett (center) accompannied by Ashok Shah CEO Apollo Insurance on behalf of other partners at Kilimo headquaters last year. [Jonah Onyango, Standard]

NAIROBI, KENYA: Consumers will now have to pay more for maize flour after a government subsidy programme closed on December 31.

A random check by The Standard in several retail outlets in the city centre and estates showed that the stock of government subsidised flour was quickly clearing from the shelves and many outlets were pricing it above Sh100 for a two-kilogramme packet, from the Sh90 it was going for.

On Wednesday, Alpha Grain Millers’ Kifaru maize flour was retailing at Sh185 for a two-kilogramme packet. This is a 106 per cent rise in price just three days after the subsidy ended.

This is contrary to Agriculture CS Willy Bett’s expectations. On Wednesday, he was quoted as saying that he did not see prices rising above Sh120. He was hinging his expectations on last year’s harvest.

“The situation now as far as the supply of maize is concerned is that it has stabilised. As government, we are very keen to ensure that change in price is not anything to worry the consumer,” said Bett.

The prices of most brands might double, hitting consumers who have enjoyed the price of Sh90 since the programme started in May last year, when the Government announced a Sh6 billion subsidy on maize imports to help lower the cost of flour.

In two Tuskys Supermarket outlets in the central business district, a 2kg packet of little-known Pema maize flour was still retailing at Sh90. However, most of the brands were selling above Sh100.

Tuskys supermarket on Muindi Mbingu Street was selling Hostess maize flour at Sh149 for a two-kilogramme packet, while the same brand was retailing at Sh154 at the Moi Avenue branch. Karrymart supermarket on Moi Avenue was selling the same brand at Sh160. Other less popular brands that were still clearing the subsidised stock were Mama, Paa, and Tajiri.

Bett said he expected the subsidised flour to clear from the shelves within seven days.