- Then, farmers had to sell their maize at a throwaway price of Sh800 per 90kg bag to brokers.
- Every two kilogrammes of maize leaves the farm at about Sh56, based on NCPB’s highest buying price.
The cyclical and fluctuating prices of unga (maize flour) in the country have always pointed to a serious problem in the maize value chain.
The past one month has seen maize flour prices rise from an average Sh112 per two-kilogramme packet to the current Sh136 across the country.
This comes as a surprise to many people, considering that the country was experiencing a “glut” only last season.
Then, farmers had to sell their maize at a throwaway price of Sh800 per 90kg bag to brokers. The National Cereals and Produce Board (NCPB) bought the commodity at Sh2,300, which was raised to Sh2,500 by President Uhuru Kenyatta in January this year.
Whereas consumers are having to pay substantially high prices to access the commodity, its primary producers have nothing to show for it.
Every two kilogrammes of maize leaves the farm at about Sh56, based on NCPB’s highest buying price. The hundreds of thousands of bags that were sold at Sh800 would translate to Sh18 per two kilogrammes of maize flour.
So, what happens in between? At local mills, the cost of milling two kilogrammes of maize is about Sh10; it costs only Sh10 extra to make it finer.
What is packed and retailed in shops is grade one flour milled by big millers enjoying economies of scale, which, ideally, should translate to even lower costs.
I am not convinced that the cost of transporting the maize to millers and distributing the processed product to retail shops can account for the difference.
Millers have many ways of accessing maize — including through the government-funded NCPB stores across the country, direct purchases from farmers, from other dealers as well as imports with the help of government.
Recently, they got a shot in the arm when the President appealed to his counterpart in Tanzania to help them to access the grain in that country at more favourable prices.