Wheat, maize prices up in August on new customs levy
Average retail price of wheat per kilogramme in Kenya rose at the sharpest rate of 10.9 percent to Sh106.32.
What you need to know:
- Average retail price of wheat per kilogramme in Kenya rose at the sharpest rate of 10.9 percent to Sh106.32.
- Average price of maize which went up 9.9 per cent to Sh57.01 while that of rice grew by a marginal 0.82 per.
Wheat and maize prices rose substantially in August, according to a monthly report by the Alliance for a Green Revolution in Africa (AGRA), partly affected by a two per cent levy imposed by Kenya on the customs value of cereals imports.
A monthly food security report for August by AGRA shows that the average retail price of wheat per kilogramme in Kenya rose at the sharpest rate of 10.9 percent to Sh106.32 during the month, followed by that of maize which went up 9.9 per cent to Sh57.01 while that of rice grew by a marginal 0.82 per cent to Sh154.35.
“Starting August 2024, the Government of Kenya through the Agriculture and Food Authority (AFA) introduced a new two per cent levy on cereals’ customs value for importation and 0.3 per cent levy for exportation, which may have influenced the slightly higher prices in Kenya,” notes AGRA in the report.
“As such, Kenya’s cereals will become uncompetitive in the region and impact poor households.”
In a notice issued by AFA in May, the government had also slapped a two per cent levy on the customs value of imports of legumes and pulses including beans, lentils, soybeans, and peanuts.
The State furthermore imposed a one per cent levy on the import of roots and tubers such as potatoes, cassava, sweet potatoes, and yams.
Taxes are paid directly to AFA agents at the point of entry or exit with the authority noting that the policy was crafted as a measure to enable small food growers to compete favourably with imported produce.
Following implementation of the laws, traders voiced their reservations arguing that it violates regional trade agreements with shippers and clearing and forwarding agents in the country urging AFA to reconsider the imposition of the levy.
Last month, the chief executive officer of the Shippers Council of East Africa Agayo Ogambi said the taxes would hamper business and that they were an extra burden on farmers.
“The levies and more taxes on exports will make our products uncompetitive in East Africa and in Comesa as already Uganda and Tanzania are up in arms against the imposition of the levies,” he said.
“While AFA needs to raise revenues for the services provided, considerations must be made not to hurt consumers and also not to outprice our exports in the international markets.”
