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East Africa: Maize Prices Still High
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The Citizen (Dar es Salaam)
20 May 2008
Posted to the web 20 May 2008
Hassan Mghenyi
East Africa's maize prices are still high although a harvest season is approaching, a Regional Agricultural Trade Intelligence Network (Ratin) report shows.
As of last week, a tonne of maize was sold for $292 in Dar es Salaam, $332 in Nairobi, $317 in Kampala and $271 in Kigali.
In Mombasa, the price was $349 while in Eldoret and Nakuru prices were $308 and $323 respectively.
The wholesale price statistics maintained by Ratin indicate that maize prices have increased significantly in the last two months in Nairobi by over $40 per tonne.
The prices are forecast to continue to rise steadily until fresh supplies are received.
Prices in Tanzania have remained higher. A 100-kilo bag of maize was sold for an average of Sh31,147 last week - slight higher than Sh31,065 the previous week.
A 100-kilo bag of maize was sold for Sh35,678 in March 2008 from Sh18,572 in March 2007 in Tanzania.
The trend was partly attributed to high maize exports to neighbouring countries despite a Government ban on cereal exports and a waiver on duty for maize imports from January to May this year to avert a food shortage.
However, neither the export ban nor the import have succeeded.
Maize is still smuggled out of the country. Moreover, prices of imported maize are higher than those in East Africa.
Rising transport costs following increasing fuel prices are also forcing transporters to pass costs to their customers.
Ratin's March 2008 report forecast a flow of maize to Dar es Salaam from southern Tanzania from mid-May.
As a result of the onset of harvesting in the bimodal areas such as Tanga, Arusha, Babati between June and July, maize will flow to Dar es Salaam and to Kenya through Namanga, Taveta, Horohoro and Tarakea.
Kenya's demand for maize is anticipated to rise during the second half of the year due to poor production as growers fled their homes and farms during the post-election violence.
The maize trade between Uganda and Rwanda is expected to continue throughout the year.
Rwanda imports an average of 6,000 tonnes of maize a month from Uganda.
Tanzania produced 3.66 million tonnes of maize in the 2006/07 season - more than the national consumption of 2.925 million tonnes.
Kenya produced 2.88 million tonnes against the national requirement of 2.85 million while Rwanda produced 102,447 tonnes against its demand of 95,000 tonnes.
Meanwhile, Kenya has approved a plan to import 270,000 tonnes of white maize free of genetically modified organisms from South Africa through the National Cereals and Produce Board (NCPB).
This is an emergency measure to cushion the country's food anticipated food deficit in August and September.
Kenya's maize stocks will run below the minimum requirement of 270,000 tonnes a month in August.
NCPB will import maize duty free under this arrangement which would have otherwise attracted a 50 per cent duty because it is originating from outside the Common Market for Eastern and Southern Africa.
Harvesting GM-free white maize in South Africa will start next month.
The earliest time Kenya can receive the maize is early August. In addition, only limited quantities will be available since most of the white maize produced is genetically modified.
The import parity price of white maize imported free of duty from South Africa in August will be about $330 a tonne in Mombasa and $365 in Nairobi.
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This will be much lower than the local market price of $350 and $332 in Mombasa and Nairobi respectively.
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