The State has stopped release of Sh1 billion maize from the strategic reserve to millers amid allegations that some processors wanted to buy the grain cheaply for trading.
Principal Secretary in the Ministry of Agriculture Hamadi Boga stopped the release after a letter from one of the millers claiming that rival firms want to trade with the cheaper government maize.
The letter came from Peter Kuguru, the chairperson of the United Grain Millers Association — a lobby from small millers — purporting that members from a rival group, Grain Mill Owners Association, wanted to sell that grain at market rate.
The State is selling a 90 kilo bag at Sh2,300 against the current market price of Sh3,300, which has pushed the cost of maize flour to a high of Sh120 for a two kilo packet up from Sh85 in January.
Millers who paid the Sh1 billion for the cheap grains three weeks ago have protested the delayed release, arguing that holding their money without the grains has hurt their cash flow.
Grain Mill Owner Association and Animal Feeds Manufacturers (AKEFEMA) have warned that Kenyans are going to run out of maize flour in the next couple of days and that the price of livestock meals is going to increase further if the grain is not released immediately.
“Kenyans risk running out of flour in the next couple of days following maize shortage in the market and the delays by the National Cereals and Produce Board (NCPB) to distribute the produce. In the same vein, livestock farmers will be hit by the expected rise in the cost of animal feeds,” said chairman Grain Mill Owner Association Mwangi Njuguna.
“The arguments by the said member has no basis at all given that some of the members under this umbrella body have paid and already allocated their shares,” he added.
The government had allocated millers maize basing on their installed capacity with the larger processors getting 1.1 million bags with their small-scale counterparts
The millers also urged the government to expedite the process of imports of both white and yellow maize because the available stocks can only last up to July.
“The window on imports of yellow maize from Black Sea nations will be coming to an end very soon and if the orders are not made now, then it means we will have to import from as far as Mexico, which will come at a higher price,” said Martin Kinoti, AKEFEMA Secretary-General.
Mr Kinoti said humans and animals have been competing for the same white maize as their source of food and that the situation is worsened in times of shortage as it is the case now.