Animal feed companies close shop as maize shortage bites

KENYA – Shortage of raw material has forced 10 per cent of animal feed manufacturers to close shop even as the prices of their products skyrocket on account of limited supply of maize.

The Association of Kenya Feeds Manufacturers (AKEFEMA), which has a membership of over 90 milling firms, said they had been hit hard by the current shortage forcing them to accumulate stocks for up to a whole week before resuming operations.

The scarcity has also seen the price of maize shoot up to Sh4,500 a bag from Sh3,500 last October.

“Some of our members have closed because they do not have raw material to process and the ones who are operational are struggling to get the raw material,” said John Gathogo, publicity and marketing chairman at Akefema.

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The price of a 70-kilogramme bag of chicken layers mash has increased to an average Sh3,000 from Sh2,400 last November.

The price of dairy meal has increased by Sh500 to sell at Sh2,000 per 70 kg bag from Sh1,500 in November.

Mr Gathogo said the association did not see any sign of improvement in the near future as maize supply remains tight.

He said the move had forced manufacturers to send home casual workers while the permanent staff are facing layoff.

“Manufacturers who are operational are working at half of the installed capacity and cannot continue paying employees when half of the capacity is not being utilised—there is high likelihood of declaring them redundant,” he said.

The manufacturers have been banking on Ukrainian yellow maize importation for cattle that is taking long to arrive in the country.

The government wants to import yellow maize to ease pressure on the white variety used for human and animal food.

Research findings by agriculture think-tank Tegemeo Institute of Research indicated that Kenya produces enough maize to feed the population based on estimated per capita consumption, but other uses like seed, animal feeds manufacturing increase national demand.

Food situation report from the Ministry of Agriculture shows that two per cent of total maize harvest is used in animal feed manufacturing while another one per cent is retained as seeds.

Dairy farming has attracted more investors due to dairy products demand.

The country is presently counting on Ethiopian and Mexican maize imports to ease the shortage.

April 5, 2017: Business Daily

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