Philip Ngunjiri
6 September 2008
Nairobi — Kenya is likely to face a maize shortage by mid next year, as the country's stock would have dwindled to less than a month's supply of grain.
The country consumes about 270,000 metric tonnes a month and national stocks are expected to drop to about 163,000 metric tonnes by end of June 2009.
Uganda will be in no better position with a grain stock of slightly more than a month's supply by then. Tanzania's position will be boosted by harvesting in the southern lowlands which starts around June.
This means Kenya will face a grain shortage estimated at 136,500 metric tonnes by mid 2009.
This year, the country had a shortfall of approximately 270,000 metric tonnes which the government has tried to cover by supplying millers with maize stock held by the National Cereals and Produce Board, which it purchased from the previous seasons.
In addition, the government is importing about 140,000 metric tonnes, but even with this arrangement, supply is still not adequate as most processors are struggling to get maize for daily milling. The situation could get worse by next July because the cereals board will not be holding significant stocks to supply the millers.
According to the Regional Agricultural Trade Intelligence Network, Kenya needs to plan to import maize to cater for the period between July and October, 2009, when the next big maize harvest will be expected.
The network is a USaid-funded project comprising the Famine Early Warning Systems Network Project (FEWS NET) which focuses on crop production and trade data, and the Regional Agricultural Trade Enhancement Support Program (Rates) which deals with changing trade policy to enhance regional trade in maize.
In August, the average wholesale maize price in Nairobi, Dar es Salaam and Kampala saw the lowest price in Dar es Salaam at $240 per metric tonne and the highest in Kigali at $362 per metric tonne. In Nairobi, it was $341 per metric tonne while in Kampala the price was $257 per metric tonne.
The drop in the wholesale maize and beans prices in Dar es Salaam was as a result of harvesting in most of the growing areas in Tanzania.
In June, prices of maize dropped by about 12 per cent in Dar es Salaam compared with January 2008, but have remained relatively stable at $240 per metric tonne and are not expected to drop much further.
The price statistics maintained by Ratin also point to the fact that wholesale prices in Kampala have also dropped since mid-June following the onset of the harvesting season.
According to information by Ratin monitors in Busia, maize supplies to the district have increased following the high demand by Kenyan traders.
Maize from Uganda through Busia is going all the way to Nairobi and parts of eastern Kenya in areas such as Meru, Machakos and Isiolo.
The increased maize supply necessitated the drop in prices at Busia from $370 per metric tonne in July to $318 per metric tonne in August.
In Rwanda, there has been no such relief on commodity prices. Wholesale maize prices in Kigali have been, on average, above $340 per metric tonne since April 2008. The Ratin price database indicates that maize prices in Kigali have gone up by $30 since then.
In Nairobi, wholesale maize prices which have been rising since February 2008 are currently dropping. The estimated rise in price between February and May 2008 was 60 per cent while the drop since June has been 10 per cent.
The declining price trend in Nairobi is due to increased domestic supply from mainly two sources.
The first source is recent harvests from the bimodal areas, while the other is the thriving cross-border trade inflows from Uganda and Tanzania. About 48,672 metric tonnes (541,000, 90-kg bags) of maize has been imported from June to August 2008 from the two countries.
Further easing in price may be realised when additional maize supplies from Tanzania and South Africa are received into the country.
Reports say that the government of Kenya is officially importing 4,500 metric tonnes (50,000 90-kg bags) of maize from Tanzania and another 135,000 metric tonnes (1.5 million 90-kg bag) of maize from South Africa is expected through the Cereals board.
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