Kenya opens window for import of 12.5m bags tax-free maize

Friday July 5 2019

 

Nairobi. Kenya's Treasury is set to open a window for duty-free import of 12.5 million bags of maize to meet a shortfall that has seen shelf prices hit Ksh125 ($1.22) for a two-kg packet of flour.

The imports are expected to start at the end of this month and last until end of October, in time for the next harvest, Andrew Tuimur, the Chief Administrative Secretary (CAS) in the Ministry Agriculture told Senators yesterday.

The importation will be done by private companies.

Ten million bags out of the 12.5 million earmarked for importation will be white maize for household consumption while 2.5 million will be yellow maize for processing of animal feeds.

"We anticipate to begin importation of maize at the end of this month. As we speak, the country has enough maize stock to last us a month," said Dr Tuimur while addressing the Senate committee on Agriculture.

Agriculture Secretary Mwangi Kiunjuri in April said the country had stocks to last only up to the end of June, following failure of the long rains season.

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Irregular import of the grain last year, however, flooded the local market, causing an uproar from maize farmers who suffered a prolonged slump in prices.

Duty-free maize

The Treasury has to pass a gazette notice allowing importation of duty-free maize, which otherwise attracts a 50 percent tax under the East African Community customs union.

"We are slow this year on imports because of what happened last year. We want to correct the mistakes that happened and ensure that we have the right quantities of maize and of good quality," he said.

Dr Tuimur, however, ruled out offering a subsidy to maize millers as was the case last year when the flour processors got cheap stocks from the National Cereals and Produce Board.

He told lawmakers the country currently has two million bags of maize in the Strategic Food Reserve (SFR), out of which 1.5 million will be available to millers if they exhaust their stocks.

Millers have bought 70 percent of the 1.7 million bags of maize that the government offered them. Another 300,000 has been set aside for animal feeds.

About 3.5 million of the 90 kg bags of the SFR maize has been released to the market to curb rising prices.

The price of a bag of maize currently ranges between Ksh2,500 ($25) and Ksh3,600 ($36) while the 2kg maize flour packet is retailing at between Ksh113 ($1.10) to Ksh125 ($1.22), up from Ksh80 ($0.8) to Ksh95 ($0.93) at the start of April.

"Maize is a very sensitive crop. I want to assure the country that we have maize to last us to end of July. But we are thinking of importation to see us through the period August to November and we are waiting for the necessary approvals," Dr Tuimur said shortly after meeting the Senate committee.