Trends in Maize Price Kenya for 2017-2018
Maize is grown by 98 percent of Kenya’s 3.5 million smallholder farmers and in 2012 Kenya produced 3.8 million tons of maize on 2.2 million hectares of land according to the Tegemeo Institute data. Small and medium scale farmers produce about 75 percent of the nation’s’ maize crop, while large-scale farmers produce the remaining 25 percent.
In normal years, 25-35 percent of total marketed maize is sold directly to the National Cereals and Produce Board (NCPB) by medium and large producers. Smallholder producers sell 96 percent of their maize to private traders/brokers or consuming households. NCPB is a government tool used to regulate the market by purchasing maize and selling it below the cost of procurement to incentivize production, while keeping prices low for consumers.
In the 90’s Maize prices were affordable as the buying and selling prices were favorable to households. Despite the fact that there were a number challenges, farmers were able to harvest the cereal and sell it at a price that favored both them and the consumer. The graph below gives a summary of maize prices between the year 1990 and 2000.
Decline in maize production in the past years has been as a result of some of the following reasons; Weather variability, limited agricultural land expansion, Inefficiencies in marketing boards, Low producer prices, a disincentive to production and farmers Shifting away from maize to other enterprises
Other challenges that maize farmers have been facing include low and declining soil fertility, Inadequate use of quality seeds, poor quality seeds, delayed supply and inadequate amount of certified seeds and Slow pace of hybrid replacement, disease, High fertilizer cost, Dramatic growth in fertilizer consumption in Kenya and Affordability too is a key challenge to fertilizer use among smallholders.
In Kenya, maize used to be termed as an inferior good as its share in staple food expenditures was highly being consumed by poor households. Things have taken a turn especially in the course of 2017 and the cereal is now a rich man’s product. This is due to the shortage of maize caused by the prolonged drought that hit the country since August 2016.
Kenya faces a growing structural deficit in maize production and this is normally met through duty free imports from the East African Community (EAC) countries of Uganda and Tanzania but when these are insufficient the government lowers import duty and imports are made from Malawi and South Africa. In 2017, these countries could not come in handy for the rescue of Kenya as so much was needed and a lot more had to be done, including importing maize from Mexico.
As Kenya’s most consumed meal, the hiked prices tend to affect middle income households budgets. Flour prices have not changed since last year August as a 2-kilogram bag has been going at an average of 115 shillings from the previous 90 shillings. Currently, the average maize price for a 90-kilogram bag of maize across the country lies at 4,514 shillings across the country. The prices are ranging between 4,000 shillings in Nakuru and Malindi respectively and 4,800 shillings in Nairobi, Mombasa, and Kisumu.
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