Mills grind to a halt as traders release flour – Business Daily
A young man carries bales of Maize flour from a lorry making a delivery to a shop in Mukuru Kwa Njenga slums on June 23, 2022. PHOTO | FRANCIS NDERITU | NMG
Millers have cut down on processing after the flour that had been hoarded by traders resurfaced following an end to a subsidy, making it difficult for factories to compete with the cheap product on the market.
Millers say middlemen are selling the flour to retail outlets at Sh1,800 per bale of two kilogrammes while they are trading the same at Sh2,200 based on the current price of maize, making it difficult for them to be on the same footing.
Stockists had hoarded huge quantities of flour when the subsidy programme was rolled out last month, creating a shortage despite millers churning out the commodity.
“We have stopped milling because the flour that we have is not moving as retailers tell us that they are buying the same at a lower price from the stockist,” said Ken Nyaga, chairperson of the United Grain Millers Association (UGMA).
“We cannot compete with our brands in the market and we may have to wait until it’s exhausted before we resume milling activities,” he added.
The association, which accounts for nearly 80 percent of the total flour market, says the price of maize has gone up when compared with a month ago as a 90-kilogramme bag is now selling at between Sh5,800 and Sh6,000, making it expensive to mill flour.
Mr Nyaga said it will take at least three weeks for the cheap flour to be eaten out of the market.
Most retail shops in Nairobi have now stocked flour with a two-kilogramme packet going for Sh210.
Supermarkets have been going without the subsidy flour for the last month on the back of supply hitches, which had earlier been blamed on panic-buying.
President Uhuru Kenyatta last month inked a deal with millers to cut the price of maize flour to Sh100 from Sh210 initially, under a Treasury-backed subsidy, which was introduced just a few days before the August 9 General Election.
The subsidy, however, ended a few days after Kenyans went to the ballots on what many viewed as a strategy to woo voters.
Mr Kenyatta was supporting former Prime Minister Raila Odinga in the just concluded election.