Uganda comes to the rescue as East Africa faces maize shortage

Wednesday February 1 2017

In the past three months, Uganda has exported

In the past three months, Uganda has exported more than 28,000 tonnes of maize worth $14 million to the region PHOTO | ALLAN OLINGO 

By ALLAN OLINGO

In the past three months, Uganda has exported more than 28,000 tonnes of maize worth $14 million to the region, as countries such as Burundi struggle with the highest maize prices recorded in recent times.

This year, Uganda has sold 13,312 tonnes of maize to its neighbours with the bulk going to Tanzania (7,240 tonnes), followed by Rwanda (3,566 tonnes), then Kenya (2,506 tonnes) as food insecurity reaches alarming levels across various parts of the region.

Kenya, which had banned the importation of maize, plans to bring in the grain from Mexico.

Last week, Agriculture Cabinet Secretary Willy Bett admitted that the government was considering importing maize from Mexico as early as this week. A week ago, he had said the country had enough maize to feed the population for the next five months, if the current drought persisted.

“We have established that Mexico has sufficient white maize to meet our needs. We have discussed the matter with them. We shall finalise the plans and decide the amount to import and timeline for the shipment,” said Mr Bett, adding that he expects the Treasury to give tax breaks for the imports. Maize from outside the region is usually subjected to import duty.

No need to panic

Tanzania, which is Kenya’s traditional source market for its imports, banned maize exports in September last year. But, it is also now dealing with shortages even as Prime Minister Kassim Majaliwa denied that such a situation existed.

“We have enough food stocks despite the rains failing in parts of the country. I don’t think the public should panic because we have enough food in our reserves to last till June,” said Mr Majaliwa.

Recently, Tanzania’s Agriculture, Food Security and Fisheries Minister, Charles Tizeba, said the country’s food stocks were sufficient as there was surplus output in the past season.

Late last year, Tanzania said it had an excess of three million tonnes of cereals and it exported almost half of that to neighbouring countries, while the remainder was stored in its strategic reserves.

“The National Food Reserve Agency (NFRA) has over 62 per cent of the target cereals for this year and we already have over 90,000 tonnes as reserve, which we are ready to use to help stabilise market prices,” said Dr Tizeba.

Burundi shortage

However, data from the Regional Agricultural Trade Intelligence Network (Ratin) shows that since the start of December, Tanzania has become the biggest importer of maize from Uganda, through the Mutukula border post, taking in more than 8,000 tonnes of maize in January; Rwanda followed with 4,428 tonnes imported from Uganda through its Gatuna border.

“The maize coming from Uganda into Tanzania is headed to Burundi, where the dire food shortage has seen the prices rise to $900 per tonne, the highest in the region. Given that it can’t import its food through Rwanda — after it banned commercial food movement across its border — Tanzania has become its preferred route,” Emmanuel Tesambile, an official at the EAC Foodnet organisation, told The EastAfrican.

More than 1.5 million people in Burundi are in dire need of food assistance, according to the latest report by the Food and Agriculture Organisation. Last week, the country’s Institute of Economic Studies and Statistics said the rise in food prices had driven Burundi’s inflation up to 9.6 per cent year-on-year in December, from 7.1 per cent the previous month.

Food prices rose to 13.8 per cent in the year to December, from 9.1 per cent in November.

Last September, Rwanda said it was facing an acute maize shortage after a poor harvest. The country’s Ministry of Agriculture and Animal Resources said reduced food production in the country was expected as the leading maize growing areas experienced bad weather including prolonged drought.

Despite the country producing a projected 908,772 tonnes of maize, only 270,000 tonnes are likely to reach the market due to poor post-harvest handling and informal market trade.

Kenya is also struggling with its maize reserves, and is already experiencing a spike in maize flour prices as millers jostle for the available grains at government stores. Currently, a 2kg bag of maize flour is selling at $1.06, compared with $0.85 last year.

The chairman of the Kenya Cereal Millers Association Nick Hutchinson, said it has been receiving limited supplies from Tanzania, which has helped keep prices stable, after Dar es Salaam’s limited exports last September caused a rapid increase in maize prices.

“This is the highest price in the past five years and it will continue to rise due to limited supply of maize in the market. We were banking on the harvest from Tanzania to boost our stocks because the supply of quality maize from the government silos has remained unstable,” said Mr Hutchinson, who is also the chief executive of Unga Maize Millers.

Data from Ratin shows that since September, Kenya has imported 4,765 tonnes of maize from Tanzania. This is a big drop compared with 14,674 tonnes it imported before the September ban came into effect. However, in the past two weeks, it has increased its imports from Uganda to 2,321 tonnes through its Busia and Malaba borders.

Maize output in Kenya have fallen from a high of 41 million bags in 2012  to 21 million bags last year, which is blamed on poor weather. The country needs at least 32 million bags to be food secure, leaving a deficit of 11 million bags.

As at the end of last year, Kenya had 21 million bags of maize, held by both the national reserve and farmers. The National Cereals and Produce Board has so far purchased 1.4 million bags.

Currently, the maize from Uganda is being purchased at $3,08.58 per tonne by Tanzanian, Kenyan and Rwandan businessmen. On retail terms, Bujumbura still has the highest prices of maize, trading at $83.14 for a 90kg bag of maize, up from $38.04 in September last year.

In Dar es Salaam, prices are at $48.18 per 90kg bag, from $29.41 in September last year. In Nairobi, a 90kg bag of maize is currently selling at $36.56, from $31.59 four months ago, while Kigali has seen the prices rise from $23.37 per 90kg bag in September last year to $47.91.