Millers get 3m bags of maize as State eases flour prices

Economy

Millers get 3m bags of maize as State eases flour prices

At least three million bags of maize will be released to millers from the Strategic Food Reserve (SFR) at Sh2,300 in a deal aimed at curbing flour prices that have increased 29 percent in the past month. FILE PHOTO | NMG 

At least three million bags of maize will be released to millers from the Strategic Food Reserve (SFR) at Sh2,300 in a deal aimed at curbing flour prices that have increased 29 percent in the past month.

Noah Wekesa, chairperson of SFR oversight board, said they had agreed with millers on the deal and the grain would be released from National Cereals and Produce depots starting next week.

The move is aimed at curbing the rise in flour prices, which has seen a two-kilogramme packet price on the average rise from Sh86.47 in March to Sh112.40 in the third week of April following a shortage of maize, according to the Kenya National Bureau of Statistics.

“We have agreed to release at the maize to millers to check on the rising cost of maize flour,” said Dr Wekesa.

Millers have warned that the cost of the staple will rise beyond the peak Sh135 a packet recorded in 2017, which forced the State to offer subsidies to maize importers to help lower the cost of flour. The price of a bag of maize has gone up to Sh3,400 from Sh2,300 in February and is forecast to breach the Sh5,000 mark this year without State intervention.

This will put pressure on household budgets and jerk inflation, which rose from 4.35 in March to 6.58 per cent last month — the highest level in 17 months. In 2017, the subsidy programme lowered the price of a 90-kilogramme bag of maize to Sh2,300 from above Sh4,000, forcing the State to control the two-kilogramme packet of flour at Sh90.

The government has cited hoarding of maize for the price jump, arguing that the country has enough grains after a bumper harvest last year.

Maize harvest hit 40.9 million bags last year, reflecting a 20 percent rise that was expected to deliver cheaper flour.

Credit: Source link