Queries as Kenya frustrates Uganda’s powdered milk

The Dairy Development Authority (DDA) has confirmed that Kenyan authorities have reduced issuing export permits to Uganda’s powdered milk.

Mr Samson Akankiza, the executive director of DDA, told this publication at the weekend that the authorities have reduced issuing permits to only powdered milk by about 20 percent.

“I don’t have figures off-head but the reduction is about 20 percent. Other products are getting permits except milk powder but the market is still open and Uganda milk players are exporting products there,” he said.

“But like the market, that is what they are using to protect their local industries. The official position is that the ban was lifted and now we are seeing reduction in volumes of milk powder being exported there,” he added.

Mr Akankiza’z confirmation followed a complaint by Mr Benson Mwangi, the general manager Brookside Limited, who said their milk is being denied export permits by the Kenya Diary Authority (KDA), and even those that get are delayed.

In the April 5, 2023, letter, Mr Mwangi said they are facing a challenge where the KDA has imposed non-tariff barriers on their products.

“Effective March 19, 2023, the Kenyan government through Kenya Dairy Board stopped issuing permits for our dairy products in the Kentrade system, affecting our factory output significantly,” the letter reads in part.

The development came after Mr Harry Kimtai, the Permanent Secretary of Kenya’s Ministry of Agriculture and Livestock Development, on March 14, 2023, announced the suspension of the ban on the milk powder imports from Uganda.

“Take note that the importation of products under the East African Community (EAC) protocol refers to goods being imported from outside the East African Community, while goods traded within the EAC are referred to as transfers,” Mr Kimtai said.

Mr Mwangi said they continue to grapple with non-issuance and sometimes delays of issuance of export permits by the Kenya Dairy Board.

This, he said, has affected their sales and the planned Shs38 billion investment plans to finance the refurbishment, upgrade and expansion of the factory facilities in Kampala.  They have already invested Shs226 billion in Uganda’s dairy sector.

Brookside is among the leading milk producers and exporters in Uganda alongside; Pearl Dairies, Jesa Farm Dairy, Amos Dairies Uganda Limited, Paramount Dairies Limited, GBK Dairy Products Limited and Lakeside Dairy Limited among others

Between June 15 and 18, three major milk players; Amos Diaries, Pearl Diaries and Brookside will sign further agreements with their Algerian counterparts, to operationalise Uganda’s exporting of powdered milk to Algeria.

“The Algerian business community will be in Uganda to conclude the remaining logistics and prices. They will sign deals with major processers, including Amos, Pearl and Brookside, because they are currently the ones with capacity to produce powdered milk while others are still building capacity,” he said.

The delegation’s visit follows President Museveni’s earlier visit to Algeria in March where he signed a memorandum of understanding with his Algerian counterpart.

Background
According to the 2021/22 DDA Annual dairy performance report, Uganda’s milk production increased to 3.22 billion litres in 2021/2022 from 2.8 billion litres in the financial year 2020/2021, generating at least Shs382.2 billion, as compared to Shs344.2 billion in FY2020/2021. Kenya has been among the leading buyers of Uganda’s milk products.