Unga prices unlikely to come down until July – millers
Flour (unga) prices are unlikely to come down until July when the country is expected to have adequate stocks to meet its needs, millers said on Monday, setting up consumers for two and half more months of pain at the shop.
Industry lobby, the Cereal Millers Association (CMA), said in a statement that the steep rise in the staple’s prices is the result of a severe maize scarcity that is unlikely to be resolved until enough imported stocks land in the country – a process they expect to take one and a half months.
The CMA said the consignment of maize expected to land in Mombasa on Tuesday is not sufficient to stop ongoing price inflation.
“Since in the initial weeks of the import programme some millers will have access to imported maize and others will not, the CMA does not expect maize flour prices to stabilise until adequate imported grain stocks are distributed across all the mills,” said the statement.
“This is expected to be in late June or early July. When this happens, prices are expected to settle at the Sh125 – Sh135 per two kilo packet range.”
A two-kilogramme packet of flour is currently retailing at an average of Sh150, up from Sh90 last November.
HIGH MARKET PRICES
Millers reckon that most of them will continue to purchase maize at the prevailing high market rates until there is sufficient supplies.
“These prices (market price) are significantly higher than the cost of the recently released government maize,” the CMA said.
The first consignment of Mexican maize is expected to land in Kenya at a price of between Sh3,500 and Sh4,400 for a 90kg bag.
Pricing of the maize depends on volumes purchased and timing of the purchase, the millers said in a response to the food price inflation rage that has seen some commentators blame millers for artificially causing the price inflation by hoarding the maize.
The millers said that the worsening scarcity of grains has continued to pile pressure on maize, which is now retailing at between Sh4,300 and Sh4,500 for a 90kg bag.
“Some millers are unable to produce enough maize flour to meet customer demand – they either do not have access to adequate grain and or are unable to compete with the prevailing market prices,” the statement said.
The millers said the inflow of Ethiopian maize, which was expected to ease the shortage, slowed down in the past week having brought to the market limited quantities that are priced at between Sh4,200 and Sh4,400 a bag.
Kenya is among the East African countries that signed a deal with Ethiopia to buy grains worth Sh5.5 billion, to help ease the acute shortage. The deal allows Kenyan traders to import maize and pulses after signing 51 contracts amounting to 275,000 tonnes.