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Debate intensifies on Kenyan maize imports

03 October 2014

According to FAO, cereal production in Eastern Africa is expected to have increased by 0.9% between 2012 and 2014, with a projected annual increase of 4.15% in 2014. However, two of the major cereal producing countries, Kenya and Uganda, will see production continuing to decrease in 2014, taking the cumulative fall over the 2012–14 period to 15.6% and 14.3% respectively. Somalia, Rwanda and Burundi are also forecast to face below-average levels of cereal production. Even in countries where production is growing, some regions will face shortfalls.

Eastern African cereal production, including rice (million tonnes)

  2012

2013

(estimate)

2014

(forecast)

2012/14

% change

Eastern Africa 44.8 43.4 45.2 +0.9
Ethiopia 21.1 23.6 23.6 +11.8
Kenya 4.5 4.1 3.8 –15.6
Sudan 5.9 2.9 5.1 –13.6
Tanzania 8.0 8.0 8.1 +1.3
Uganda 3.5 3.1 3.0 –14.3

Source: FAO, July 2014 (see below).

In June 2014, it was reported in the East African media that the Kenyan government was planning to purchase some 65,000 tonnes of maize (about 720,000 90-kilogramme bags) from within the region to reduce price pressures. In a context where “Kenya consumes 3.72 million bags of maize a month” (334,800 tonnes), it was estimated that imports of around 270,000 tonnes (3 million bags) might be needed to meet production shortfalls up to the end of August.

Initial discussions launched with Tanzania led to an agreement between Kenya and Tanzania for the sale of 50,000 tonnes of maize from the Tanzanian National Food Reserve, following a good Tanzanian harvest and the emergence of “a huge surplus”.

The agreement between the Tanzanian and Kenyan governments was seen as an important way “to cool down runaway maize and flour prices” in Kenya. Press reports indicated that “the price of a 90-kg bag of maize in Kenya has risen 30 per cent in the last nine months, driven by a shortage ahead of the harvest season.” The cost of the maize and transport to Kenya is estimated at US$73 million (approx. KSh6.5 billion at current rates). The maize imports were to be halted “after the harvest season in mid-August to cushion local farmers from low prices”.

Representatives of the Kenyan milling industry welcomed the move, commenting that it would “go a long way in containing high prices of maize in the country, hence [reducing] the cost of flour”. However, Kenyan cereal farmers criticised the deal, arguing that delivery would coincide with the harvest period and would depress prices, undermining the investments made by the farmers in maize production. They maintained that the government was permitting imports while the National Cereals and Produce Board (NCPB) had still not paid farmers for deliveries made in the last season (see Agritrade article ‘ Kenyan NCPB to be restructured amid shortcomings of current operations’, 4 October 2014).

In addition, Tanzania has concluded an agreement with the World Food Programme (WFP) to supply 24,000 tonnes of maize to countries experiencing food shortages. 

Editorial comment

The variable patterns of cereals production in East Africa in 2014, alongside the current maize supply agreements negotiated between the Tanzanian and Kenyan governments and between the Tanzanian government and the WFP, would appear to highlight the importance of increasingly regulating the cereals sector on a pan-regional basis.

This could greatly enhance the security of food supplies across the region, by cooling down price volatility, while allowing the development of a structured trade designed to minimise local price disruptions which operate to the detriment of maize producers.

This could help to square the circle of concerns arising from current Kenyan government initiatives to import maize from Tanzanian food reserve stocks. Critical to any effective regional regulatory framework will be the transparency and predictability of the cereals sector trade framework established, and the accommodation of all relevant pan-regional factors. In this regard, it should be noted that the combined effect of purchases by Kenyan millers and increased demand from South Sudan led to maize meal prices rising in Uganda at the same time as it served to cool down price rises in Kenya.

A well-functioning and reliable regional information system on the regional supply and demand situation, price trends and import requirements could assist in improving maize trade flows and avoid inconsistencies in efforts to promote local production and import regimes. Existing information systems such as the Regional Agricultural Trade Intelligence Network (RATIN) run by the Eastern Africa Grain Council could potentially play an increasingly important role.

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