Why animal feeds prices still rising despite duty free import offer

Animal and chicken feeds manufacturers are warning that prices of these commodities will continue rising despite the State’s duty-free import window of the raw materials.

The Association of Kenya Feeds Manufacturers (Akefema) says its members have failed to import any raw materials given Kenya’s ban on genetically modified (GMO) products.

The association’s secretary general Martin Kinoti told The Standard that European countries that would have supplied the materials do not meet Kenya’s demands for 100 per cent GMO-free products.

“There is no material coming in because government has insisted on 100 per cent GMO-free which doesn’t exist. The market offers 99.1 percent as European standards but government has insisted on 100 percent,” said Kinoti.

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“It is not possible to get 100 per cent GMO-free animal feeds anywhere right now and if you do, it is for specialty feeds, which is twice the price.”

The standoff

Kinoti says Akefema wrote to the Ministry of Agriculture two weeks ago asking Kenya to modify the specifications to allow for European standards but they are yet to get any response.

The standoff means the 18 millers that were granted window to import duty-free animal and chicken feeds between November 1, 2021 and October 31, 2022 cannot ship in any of these inputs.

Kinoti says local stocks are fast getting depleting and the country may soon grapple with stock outs as opposed to just the concern with rising prices.

“We are nearly there. Companies which have a bit of stock and can’t restock will soon run out of it. Already 37 feed mills have closed,” said Kinoti.  

Millers were eying Ukraine, South America and the US to bring in 225,950 tonnes of yellow maize, 126,300 tonnes of soya beans meal, 58,250 tonnes of soya beans, and 20,500 tonnes of cottonseed cake.

Also supposed to be imported duty-free was 83,300 tonnes of sunflower seed cake, 34,000 tonnes of white sorghum, and 28,750 tonnes of fish meal.

African countries such as Rwanda, Uganda, Zambia, Tanzania, and Malawi which produce 100 per cent GMO-free raw materials and have been supplying to Kenya are also facing their own shortages, according to Kinoti.

India, which has for long been an exporter also suffered stockouts due to Covid-19 disruptions and has been buying from East African nations, further upsetting stocks in the region.

Large companies such as Bidco Africa, Unga Farm Care, Pembe Floor, and Rift Valley Products Limited were to bring in most of the imports, mainly on account of their milling capacities.

Bidco Africa Limited was to bring in the highest amount of yellow maize (50,000 tonnes) followed by 40,000 tonnes each by Unga Farm Care (EA) Limited and Pembe Flour Mill Limited.

Pembe Floor and Soy Pro Limited topped the chart of soya bean mill imports with each expected to bring in 40,000 tonnes.

Unga Farm and Bidco Africa were each to bring in 20,000 tonnes of soya bean mill, leading in the quantity of imports in this category.

Rift Valley Products Limited was to import 25,000 tonnes of sunflower seed cake followed by Soy Pro Limited with 18,000 tonnes while Pembe led on white sorghum and fish meal with 15,000 tonnes each.

President Uhuru Kenyatta had on October 20, 2021 directed the Cabinet Secretary for Agriculture Peter Munya to work jointly with the National Treasury to develop a framework to secure a reduction in the prices of animal and chicken feeds.

“To secure a reduction in the prices of animal feeds, I order and direct the Cabinet Secretary for Agriculture, jointly with the National Treasury, to issue within seven days, a framework that will facilitate the reduction of the cost of animal and chicken feeds,” Kenyatta directed.

Waiver of duty on yellow maize was one of the three measures that the Ministry of Agriculture forwarded to the National Treasury in line with President Kenyatta's directive.

Farmers have been incurring increased costs to sustain chicken and animals on the back of a rise in prices of the feeds.

For instance, the price of a 70-kilogramme bag of dairy meal had risen from the average of Sh2,500 that farmers were paying in August 2020 year to above Sh3,500. The price of chick marsh had also risen by nearly Sh1,000.

The State is eying long term intervention measures including leasing of government land to private players so as to grow cotton and sunflower for production of animal feeds in order to cut reliance on imports.

Treasury said in a recent budget policy statement that adverse weather conditions is likely to persist, putting pressure on production of animal feeds.

“Other risks relate to lower agricultural output due to potential adverse weather conditions and continued desert locust infestation in the northern region of the country, which could potentially reduce production of food crops and animal feeds,” said Treasury.