Cereals board stares at Sh4bn loss over lack of maize market

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The National Cereals and Produce Board Eldoret depot. The National Cereals and Produce Board bought millions of bags of maize last year. FILE PHOTO | NMG 

The National Cereals and Produce Board (NCPB) risks losing over Sh4.45 billion due to lack of market for tonnes of maize it imported under the subsidy programme to cushion consumers from high flour prices.

The board is holding 217,000 90kg bags of the grain as it emerges that private millers are reluctant to buy the produce at Sh2,300. The maize was imported at Sh4,000 a bag.

The consignment is part of the 630,000 bags the NCPB released to millers last year at Sh2,300 before the end of the subsidy programme in December 31, 2017.

The government had imported 10.4 million bags mainly from Mexico and other African countries to make maize flour affordable to consumers.

“We still have more than 217,000 bags of maize imported by firms from Mexico in our stores but unfortunately the millers are reluctant to buy them,” said Titus Maiyo, NCPB corporate affairs manager.

The revelation comes after the Kenya Bureau of Standards (Kebs) confirmed that 60 per cent of maize in the NCPB store estimated at Sh7.6 billion is discoloured and contaminated and unfit for human consumption.

But Mr Maiyo on Saturday dispelled fears that the imported grain was unfit for human consumption. “The fact that the maize is discoloured does not necessarily mean that it has gone bad and is unsuitable for human consumption,” he said.

The government used Sh6 billion to import maize under the subsidy programme to lower flour shelf prices that had hit Sh153 for a 2kg packet before coming down to Sh90 following the intervention.
Millers are reluctant to purchase maize from the board and are instead opting for cheap produce from Uganda going for as low as Sh1,500 per 90kg bag.

Maize prices in the North Rift, the country’s food basket are going at Sh1,700 while the government has fixed the price of a 2kg packet of maize at Sh75.

According to the Agriculture Cabinet secretary Mwangi Kiunjuri, more than 4.4 million bags of white maize were imported illegally during the duty waiver period early last year when the government declared drought a national disaster.

Mr Kiunjuri has maintained that his ministry will rely on the Kebs report to make decision which may include destroying the contaminated maize.

But independent sources within the ministry and the NCPB disclosed plans by the government to release about two million bags out of the 3.6 million bought under the strategic grains reserve last season.
The discoloured maize that forms 20 per cent of the 60 per cent of the contaminated produce will be sold to manufactures to produce animal feeds.

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According to sources, the maize will be going at Sh 800 per bag but some of the private millers have expressed fears that the polluted produce is likely to be repacked for human consumption.

“The government has not put in place measures to guarantee that the contaminated maize meant for animal feeds does not end up in our food value chain,” said a private miller who requested not to be named.

Farmers have admitted that they have been reluctant to sell their produce to millers after the government put the price of a 90kg bag of maize at Sh1,600 down from Sh3,200 offered by the NCPB last season.

Some factories have been forced to scale down operations, milling twice a week as the demand for the sifted maize flour dropped drastically in the market.

“We have no option but reduce our operations and possibly consider restrictions due to low demand for our products by consumers,” said Kipgnetich Kimutai from Ineet Mills in Eldoret.

But the low maize price is a major boost to consumers, most of who have opted to go for posho mill flour, which is more affordable.

“I buy 2kg of maize at Sh50 and mill at Sh10, which is much affordable as compared to Sh75 offered for the same quantity in retail outlets,” said Jennifer Cheptoo from Mwanzo in Eldoret.

The farmers are demanding over Sh2.1 billion for maize deliveries to the board after the Treasury released Sh1.4 billion last month.

Moiben MP Silas Tiren has faulted the government for failing to honour pledges to farmers.

“The maize from Uganda, Tanzania and Mexico is not imported on debt but why are our farmers not been paid on time?” asked the Jubilee legislator, adding the government allocates 10 per cent of its budget to agriculture.