Consumers and middlemen are the major beneficiaries of the deteriorating maize prices due to flooding of cheap imports from neighbouring countries, which has led to a sharp decline in flour prices.
The consumers are now snubbing sifted maize flour and opting for low-cost produce from posho mills. Consequently, some millers have scaled down operations to minimise losses due to saturated market for their products.
The millers have warned that the maize prices are likely to drop further to below Sh1,000 per 90kg bags in the next two months following the importation of 6.6 million bags from Uganda and addition 653,000 bags from the National Cereals and Produce Board (NCPB).
More maize is expected to enter the country from Tanzania next month under the East African Common Market protocol, complicating the situation for maize farmers who have embarked on planting.
“We have no option but to cut down on production due to low demand of maize flour in the local market,” said Mr Kipngetich Mutai of Innet posho mill in Eldoret.
But most consumers are now opting for posho mill flour which they consider cheaper as opposed to those from the millers.
“I buy 2kg of maize at Sh50 and mill at Sh10, which is cost effective as opposed to the sifted flour,” said Ms Rhoda Cheptoo from Ainet in Uasin Gishu. A two-kilo packet of Jimbi flour goes for Sh98, Soko Sh100 and Jogoo Sh101 in most retail outlets in the North Rift region.
Some millers are contemplating reducing the workforce due to the low demand for flour.Meanwhile, cereal farmers have been thrown into panic after NCPB suspended buying the crop due to lack of storage facilities.Maize prices have plummeted to Sh1,500 with majority of farmers in North Rift still stocking several tonnes of the crop, exposing them to exploitation by middlemen.
The farmers yesterday took issue with the government’s decision to allow imports from Uganda going at Sh1,800 per 90kg. Moiben MP Silas Tiren has demanded that the list of those who import maize into the country be tabled before Parliament.