New maize shock as Tanzania freezes exports permits – Business Daily
The price of maize is expected to rise in the coming days with the end of the subsidy as all millers resume operations. FILE PHOTO | NMG
Tanzania has frozen issuance of new maize export permits in what could worsen the shortage of the product that has driven prices of flour to historic highs.
Several millers and animal feed manufacturers told Business Daily the neighbouring country stopped issuing permits last week, tightening the supply of the staple locally.
“We have been unable to get maize from Tanzania since last week after the country stopped issuing export permits to traders with the cutting off of stocks from Tanzania expected to push up the cost of flour,” said Ken Nyaga, the chairperson of the United Grain Millers Association.
John Gathogo, publicity secretary of the Association of Kenya Feed Manufacturers, said their members are unable to get stocks from Tanzania as well following the move that has seen processors cut down on production.
Millers are issued with a one-off permit for grain export from Tanzania and they need to apply for a new one every time they intend to ship maize out of that country.
Tanzania has for the last two years become a key source market for maize to bridge deficits especially after the two countries mended their trade ties with the change of regime last year following the death of former President John Magufuli.
Data from the Eastern Africa Grain Council shows imports from Tanzania nearly grew five-fold last year to 469,474 tonnes from 98,000 tonnes in 2020. The development has left processors jostling for stocks that are available locally and a few imports coming in from Zambia. Tanzania restricts exports to protect its local stock following poor harvests.
The Kenya Bureau of Standards (Kebs) said the maize coming in through the Namanga border has significantly declined, confirming that imports into the country at that point is originating from Zambia.
“We have witnessed a significant decline in maize coming in from Tanzania; on average we are now getting 10 trucks from a high of 80 trucks previously,” a Kebs official at the Namanga border said.
The move leaves Zambia as the only key source market for the produce to bridge the local deficit as most stocks from Uganda— also a key source — is now heading to South Sudan owing to high prices in Juba.
The shortage occasioned by Tanzanian ban will push up the price of maize locally to Sh5,900 for a 90 kilogramme bag from Sh5,400, according to millers.
Kenya has been relying on cross-border stocks from Tanzania and Uganda to meet the rising demand of flour after supply in the local market dwindled. The price of flour has jumped to Sh210 for a two-kilo pack after the subsidy programme that lowered the cost to Sh100 ended.
Countries in the region are competing for a limited white maize for flour and animal feeds.