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July 22, 2008

Kenya to import maize from neighbouring countries

Kenya will import one million bags of maize from Zambia to boost its stock and avert a looming shortage in the second half of the year.

Ministry of Agriculture officials said the consignment is expected to start arriving in August. The National Cereals and Produce Board (NCPB) is holding 1.8 million bags of maize in strategic reserves — enough to meet local consumption needs till mid August.

This amount is short of the target by one million bags. Some estimates have indicated that Kenya needs to import up to three million bags of maize in the next financial year to avert a food shortage crisis.

Last month, the government invited tenders for the purchase 270,000 tonnes of duty-free maize from the Common Market of Eastern and Southern Africa (Comesa).

Pre-qualification ended on Thursday last week paving the way for bidding to follow.

“White maize will be procured on behalf of the corporation by grain dealers who must go through the pre-qualification process,” said Gideon Misoi, the managing director at NCPB.A 50 per cent rise in food prices this year has forced many households to cut back on their consumption, according to the World Food Programme (WFP).

A two-kilogramme packet of maize flour, is currently retailing at Sh80, up from Sh50 earlier this year.
(1US$=67.5KSh)

Tegemeo Institute, an agricultural policy research institution, says Kenya needs to import at least eight million bags of maize to meet its domestic consumption needs until October when the North Rift harvests its crop.

With the first batch of the maize imports yet to arrive, the country runs the risk of importing too little too late.

By the end of February the country had a maize bank of around 28 million bags. But by this month, the stocks were down to between four and five million bags.

Even with the duty free imports, prices of cereals are expected to remain high due high shipping costs around the globe. Imported maize is expected to cost more than Sh2,000 per 90kg bag compared with Sh1,700 for locally produced maize.

Tegemeo’s projections show that the gap between demand and supply in the domestic market will recur next year and last until the harvesting season of October 2009. The projection is based on the fact that output in the North Rift is expected to drop by 10 million from an annual average of 16 million bags.

“The reason for this is that less land has been cultivated with maize and high fertilizer prices will result in lower yields,” it says.

Other supplies into Kenya are expected to come from Tanzania and Uganda as soon as harvesting starts in July.

Ordinarily, Kenya imports between 60,000-75,000 tonnes of maize from the neighbouring states but inflows from Tanzania are expected to be limited by a curb on exports.

South Africa is seen to be another vital source of imports but concern is rising over the country’s use of genetically modified seeds in its farms. Some private South Africa traders had cautioned Kenya against delays in the import implementation programme as increased demand could push prices further up.

Reports say that trade in agricultural commodities is expected to thrive as harvesting begins despite export bans imposed by various countries in Eastern and Southern Africa.

Statistics show that the largest quantity of maize ever imported during similar drought spells was 90,000 tonnes.

Pre-qualification for tenders for the purchase 270,000 tonnes of duty-free maize from the Common Market of Eastern and Southern Africa (Comesa) ended last week, paving the way for bidding to follow.

“White maize will be procured on behalf of the corporation by grain dealers who must go through the pre-qualification process,” said Gideon Misoi, the managing director at NCPB.A 50 per cent rise in food prices this year has forced many households to cut back on their consumption, according to the World Food Programme (WFP).

A two-kilogramme packet of maize flour, is currently retailing at Sh80 up from Sh50 earlier this year.

Tegemeo Institute, an agricultural policy research institution, says Kenya needs to import at least eight million bags of maize to meet its domestic consumption needs until October when the North Rift harvests its crop.

With the first batch of the maize imports yet to arrive, the country runs the risk of importing too little too late.

By the end of February the country had a maize bank of around 28 million bags. But by this month, the stocks were down to between four and five million bags.

Even with the duty free imports, prices of cereals are expected to remain high due high shipping costs around the globe. Imported maize is expected to cost more than Sh2,000 per 90kg bag compared with Sh1,700 for locally produced maize.

Tegemeo’s projections show that the gap between demand and supply in the domestic market will recur next year and last until the harvesting season of October 2009. The projection is based on the fact that output in the North Rift is expected to drop by 10 million from an annual average of 16 million bags.

“The reason for this is that less land has been cultivated with maize and high fertilizer prices will result in lower yields,” it says.

Other supplies into Kenya are expected to come from Tanzania and Uganda as soon as harvesting starts in July.

Ordinarily, Kenya imports between 60,000-75,000 tonnes of maize from the neighbouring states but inflows from Tanzania are expected to be limited by a curb on exports.

South Africa is seen to be another vital source of imports but concern is rising over the country’s use of genetically modified seeds in its farms.

Some private South Africa traders had cautioned Kenya against delays in the import implementation programme as increased demand could push prices further up.

Reports say that trade in agricultural commodities is expected to thrive as harvesting begins despite export bans imposed by various countries in Eastern and Southern Africa. Statistics show that the largest quantity of maize ever imported during similar drought spells was 90,000 tonnes.

Business Daily Africa

************************************

Tanzania has agreed to sell Kenya thousands of tonnes of maize following a formal request by the neighbouring country.

The decision was made after a high-powered Kenyan government delegation met President Jakaya Kikwete when he was on a working tour of Mkinga District, Tanga Region.

The request was advanced by Kenya's Agriculture and Food Security minister, Mr William Ruto, when he met President Kikwete on Friday.

Mr Ruto said Kenya needed about 180, 000 tonnes of maize to offset an acute shortage of food in the country, adding that the amount was needed between now and October when Kenyan farmers will start harvesting.

"Your friend President Mwai Kibaki appeals to you to continue assisting him just like you have been doing," He told President Kikwete during the talks.

President Kikwete accepted the request, but said the demand was too big to be met by Tanzania's government for the time being.

He said Tanzania would start by selling about 4,000 tonnes of maize to Kenya while exploring other opportunities of buying from farmers maize harvested last season.

President Kikwete noted that the amount requested by Mr Ruto was bigger than the amount held in the national Strategic Grain Reserve (SGR).

Reports from Kenya said l 50,000 bags of maize were expected to arrive in the country from Tanzania from next month.

Mr Ruto said the exportation of maize followed the Tanzanian government's acceptance to allow Kenya to buy the staple.

"The maize will be here by the end of this week. Although it is not enough, we expect they (Tanzania) will agree to sell more to us," the Sunday Nation quoted Mr Ruto as saying.

After the first batch arrives, the minister explained, the Tanzania government will assess its stocks with a view to selling more to Kenya. Kenya has decided to buy the produce from its neighbour because it is the cheapest option, Mr Ruto added.

Tanzania is selling the maize to Kenya at $250 (about Sh320,000) a tonne. "We decided to buy maize from Tanzania because it is cheaper if you add transport costs, and this is the best value for our money," he said by telephone.

Mr Ruto pointed out that although South Africa has enough stocks of maize, it is too expensive to import. The Government is re-evaluating its stocks so that it does not flood the market with imports at the expense of local farmers, he added.

Although Kenya's government has authorised the importation of 3 million bags to fill the gap expected between August and September, the minister said, 1.5 million bags should be enough.

He said the crop currently on farms could meet the remaining expected shortfall once farmers start harvesting it in September.

The shortage is caused by post-election violence which saw maize stocks destroyed and delayed planting in some areas, as well as left farms idle due to displacements of growers.

The Citizen

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