The first consignments of duty-free imports of sugar, rice, and vegetable oil arrived in the country this week even as the fate of imported subsidized maize still remains unknown as the government and millers fail to agree on key issues to import the commodity and ease the shortage in the country.
MV San Nicolas with 21,000 tonnes of sugar from Thailand was the first vessel to dock at the port of Mombasa with duty-free goods this year with the second vessel, MV Sheng Heng Hai, arriving on March 1 with an undisclosed volume of duty-free sugar.
This week also saw the first vessel of duty-free rice, MV Sea Prosperity, dock on Tuesday, and MV Deee4 Ilex arrived on March 1 with duty-free vegetable oil after the government gave import-duty waivers for maize, sugar, and rice last year.
As rice, sugar and vegetable oil, which normally attract a duty of 50 percent, arrive in the country, households will have to wait longer for their staple food; maize to be imported.
The price of a 2-kilo-packet of maize flour, which was expected to come down with the importation of duty-free maize, will continue to retail at Sh190 in most shops due to the shortage of maize despite the government opening window for the importation of the commodity duty-free.
Millers have maintained if the government does not consider global economic pressure such as the war between Russia and Ukraine, and the depreciating Kenyan shilling against the dollar, Kenyans will have no choice but to continue buying maize flour at high prices.
Nation.Africa has established that maize shortage in the country will continue to last in the coming weeks as millers fail to order the commodity due to a lack of agreement between importers and the government over the landing price.
According to the ship manifest from the Kenya Ports Authority (KPA), no vessel has been scheduled to dock at the port of Mombasa soon with maize. This raises fears of a serious shortage of maize despite the government allowing millers and traders to import 10 million bags of maize duty-free to ease the shortage in the country.
In the list of vessels expected in the country until 10th March this year, a total of 36 vessels will call at the Port of Mombasa with 18 accounting for container vessels, ten conventional, and four oil tankers and car carriers each but non is carrying maize.
Since December last year, the government has failed to reach an agreement with maize importers and millers.
Cereal Millers Association (CMA) said by February 22, importation permits had not been granted to 23 CMA members who applied for them because none could meet the terms and conditions set under the Memorandum of Understanding (MoU) which compels importers to commit to allocated import quotas and the locked price of Sh4,200 (ex Mombasa) per 90kg bag.
“To the best of our knowledge, we have not seen a list of gazetted importers and non of our members have been issued permits to import. At the moment, the cost of a 90kg bag of maize grain will vary depending on the source, but would be in the range of Sh5500 to Sh5600,” said CMA chief executive officer Paloma Fernandez.
The Kenyan government said traders failed to sign a memorandum of understanding committing to the recommended price of Sh4,200 for a 90kg bag as millers say the price is too low for them to break even.
Earlier, Agriculture Principal Secretary Harsama Kellow said the imports are meant to lower the cost of flour and that the maize to be shipped in has to land at a pre-determined price to have a positive impact on the staple.
Mr Kellow said they asked traders if they would import at the price that the government wants and they agreed.
“The aim of these imports is to lower the cost of flour and we cannot allow millers to import maize at any price that they want as this will not meet the government objective,” said the PS.
As a government, he said, they have a right to impose conditions on imports and millers have to adhere to such terms.
Last month millers complained that the government denied them permits and failed to issue clarity on imports, claiming there were plans to lock them out.
The government last December allowed millers and traders to import 10 million bags of maize duty-free with at least 250 traders and 22 millers applying for consideration but as at this week, only 50 were allowed to import maize.
Mr Ken Nyaga, chairman United Grain Millers Association said the cost of maize on the international market is high because of a shortage on the back of the Russia-Ukraine war that has disrupted the supply of grains, including maize and wheat, and that it is very difficult to get maize that will land in Kenya at the price that the government wants.
“There is a very serious shortage of grain in the market and the cheapest bag of maize that will land at the port of Mombasa in the coming weeks will be at Sh5,600 for a 90-kilo bag,” said Mr Nyaga.
