KENYA – Maize prices in the North Rift have hit their lowest level in eight months as farmers release the produce they have been hoarding, further easing pressure on the cost of flour.
The average price of a 90-kilogramme bag has dropped from Sh2,800 in early August to the current Sh2,200 in the country’s breadbasket even as the harvesting in South Rift is underway.
Millers link the price reduction to increased supply of the grain in the market as farmers who had withheld sales release the commodity in anticipation of lower prices on increased imports and this year’s harvest.
Tanzania has inked a deal to release thousands of bags from its strategic reserves while the harvest season in Kenya’s breadbasket is expected to start in October, raising the prospect of lower maize prices.
Unga Limited have been buying the produce at Sh2,150 while the Eldoret based Millers Corporation is offering Sh2,300 for a 90-kilogramme bag.
Unga managing director Nick Hutchson told the Business Daily that the price of the commodity had dropped because of high supply and that the consignment that they have been buying in Eldoret was meant to be transported in Nairobi.
“At our Eldoret milling plant we have more than enough stocks and whatever stocks we have been buying in the North Rift is meant for our Nairobi plant, as such we also want to factor in the cost of transport,” said Mr Hutchson.
Mr Ashok Madala, a manager at the Millers Corporation said they have had to lower their buying price to Sh2,300 from an average of Sh2,800 in the wake of increased supply in the market.
“The supply has outstripped the demand and this is the main reason why we have been forced to reduce the price,” he said, noting that the price might drop further as harvesting season approaches.