Stakeholders in the grain industry in Uganda, the ministry of Trade and experts from the National Agricultural Advisory Services are set to meet soon to discuss grain prices and the way forward.
This was revealed yesterday by Mr Chris Kaijuka, the chairman Grain Council of Uganda, while speaking to Daily Monitor about the current low prices of maize.
Mr Kaijuka admitted that the prices were dropping, a development he attributed to the bumper harvest the country has had.
“We have seen a bumper harvest not only in Uganda but even in other regional countries. As a result, the prices have gone down,” he said.
This follows the rush by grain traders from other East African countries to Uganda to buy maize at about half the international price, after a bounty harvest here, amid shortages in the region caused by drought.
Uganda has sold nearly 38,000 tonnes of maize worth $15.2 million (Shs54.2b) to its regional neighbours over the past one month, with the biggest chunk of about 30,500 tonnes going to Kenya.
Rwanda, through its Gatuna and Cyanika border points imported 5,405 tonnes of the produce from Uganda over the same period, followed by the Democratic Republic of Congo (DRC) which took 1,105 tonnes through the Rusizi, Mpondwe and Rubavu border points.
Tanzania has imported 480 tonnes through the Mutukula border.
The Kenyan traders have taken advantage of the low prices in Uganda’s Tororo, Gulu, Masindi and Lira districts to ship in the product from as low as $180 (Shs643,000) per tonne, and flipping it on the Kenyan market where a tonne is going for as high as $430 (Shs1.5m), which is more than double.
Data from the Regional Agricultural Trade Intelligence Network shows that the maize is entering the country through the Busia, Mutukula and Malaba posts.
Role of middlemen, millers
Middlemen and millers are reportedly involved in the importation of the low-cost maize from Uganda, pushing farmers into a tight corner as they had banked on selling the produce to the Kenyan strategic stores.
The government had already allocated $70 million (Shs250b) for buying 2.4 million bags of maize to replenish the Strategic Grain Reserves.
“These middlemen are just taking advantage of the common market protocol to import low-cost maize. They are paying as low as $18.4 for a 90-kilogramme bag and then blending it with the local produce. This is finding its way into the NCPB silos which is paying $32 (Shs114,000) for a similar bag. This puts farmers at a disadvantage,” said the Kenya Farmers Association (KFA) director Kipkorir Arap Menjo.
By Monday last week, the cross-border imports had peaked at 1,000 tonnes a week.
The increased imports are an indication of the dire harvest the country experienced due to drought that led to a biting shortage of maize throughout the year.
Months after the August harvest, maize prices usually drop to lows of $20 (Shs71,000) per 90-kilogramme bag, even as the October long rainy season boosts the second season harvest.
According to Mr Menjo, the cereals depot in Eldoret expressed concerns that the Kenyan farmers could be getting a raw deal given the low profit margins of importers.
“Why should they import maize from Uganda yet we have enough? We are seeing delays from the board in accepting maize from farmers, leaving them at the mercy of brokers who are offering prices as low as $25 (Shs89,000) per 90-kilogramme bag,” he said.
However, NCPB has deployed its staff to ensure the imported cheap maize from Uganda does not find its way into the silos.
“We have been receiving very good and steady deliveries of the produce across our North Rift and Western Kenya silos. We have also deployed policy inspectors to the buying centres to vet and ensure that the imported subsidised maize from neighbouring countries does not end up in our stores,” NCPB corporate affairs manager Titus Maiyo, said.