Kenyans Brace for Higher Unga Prices as Tanzania Freezes Export Permits

Maize flour stocked at a supermarket in Kenya
Maize flour stocked at a supermarket in Kenya.

Tanzania has halted the distribution of new maize export permits, potentially worsening the product shortage that has forced the increase of flour prices in Kenya.

Millers and animal feed manufacturers from Tanzania were informed that they will not be issued new export permits.

This is likely to cause a price spike in the staple in the region. According to millers, the shortage caused by Tanzania's restrictions will raise the price of maize locally from Ksh5,400 to Ksh5,900 for a 90-kilogramme bag.

According to the Association of Kenya Feed Manufacturers' publicity secretary, their members were incapable of obtaining the commodity from Tanzania.

Bags of maize at an NCPB depot.
Bags of maize at an NCPB depot.

As a result, Zambia is the only key source market for maize, as most stocks from Uganda, another key source, are now heading to South Sudan due to high prices and demand in Juba.

Kenya has been counting on Tanzania and Uganda to meet rising flour demand after the supply of maize in the domestic market declined.

The price of flour increased to Ksh210 for a two-kilo pack following the end of a subsidy program that reduced the cost to Ksh100.

The government is yet to pay millers who supplied their produce under the maize subsidy programme which ended two weeks ago. 

This is according to a statement from the cereal millers association which indicated that they are still working with the government to expedite the payment owed to millers.

The Ministry of Agriculture has been carrying out a verification process for all the invoices received as they fast-track the process which has strained the operations of maize millers facing cash flow constraints.

Kenya's subsidy programme came into play on July 20, after President Uhuru Kenyatta ordered maize flour to retail at Ksh100 from Ksh205.

Uhuru noted that the directive was part of the stimulus programme aimed at cushioning Kenyans from the high cost of living.

He added that all milling companies had been engaged in the fiscal measure to address the Unga crisis.

Undated image of maize stored in a warehouse
Undated image of maize stored in a warehouse