Posted on May, 10, 2023 at 12:34 am
Kenya’s raised maize imports have seen the general cross-border trade for the grain rise by 120 percent in the past three months, indicating the benefits of growing local produce as well as easier policy on movement of goods.
Latest data by the Food Security and Nutrition Working Group (FSNWG) shows that from January to March an estimated 380,000 metric tonnes of maize grain was traded in the region, with Uganda accounting for 96 percent of the exports, while Kenya and Tanzania imported 86 percent and seven percent of the commodity, respectively.
This is a 116 percent increase from the previous quarter (October-December), 120 percent increase compared to the same period (January-March) last year and a 178 percent increase above the five-year (2018-2022) average for the first quarter.
According to the report, maize exports from Uganda to Kenya were exceptionally high (86 percent), largely due by high prices caused by below-average harvest.
During the period under review, the share of maize in East Africa cross-border trade increased to 48 percent from 34 percent in the previous quarter, thanks to below-average production in the importing countries.
The East Africa Cross-Border Trade Bulletin by FSNWG summarises informal trade across selected borders of Tanzania, Burundi, Rwanda, Uganda, Kenya, Somalia, Djibouti, Ethiopia, Sudan, South Sudan, and DRC.
According to the report, cross-border trade is expected to increase in the second quarter and will be exacerbated by delays in sourcing cheaper supplies from overseas by Kenya, local currency depreciation, high global grain prices, and shipping costs.
In the three-month period (January-March), maize exports from Uganda to Rwanda were above average following the re-opening of their borders.
Exports from Tanzania to Burundi were also above average following the lifting of the ban on imports by Burundi, which has a deficit in maize production.
Maize exports from Ethiopia to Somalia were above average as traders released more maize into the markets following average to slightly above-average harvest expectations.
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Kenya is facing an acute scarcity of maize grains a development that has prompted to the government through the ministry of Agriculture to consider leasing 20, 000 hectares of large-scale maize farming in Zambia.
Kenya’s overall inflation for the quarter (January-March) rose to 9.13 percent from 5.6 percent in the same period last year, fuelled by increased food and fuel prices according to the Kenya National Bureau of Statistics (KNBS).
In December last year (2022) the Kenyan government waived import duty on maize and rice for a period of six months to ease shortage of the cereals and avert a food crisis.
The prices of maize flour and rice in Kenya have risen sharply largely due to low local production caused by a persistent drought and high cost of inputs such as fertiliser and diesel.
Under the deal Kenya has allowed traders to import up to 900,000 tonnes of duty-free white maize and 600,000 of duty-free milled rice from February to August this year (2023).
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During the three months period (January-March) this year maize exports from Uganda to Rwanda were above average as Uganda became the major source of maize following the opening of the borders.
On the other hand, exports from Tanzania to Burundi were also above average following the lifting of the ban on imports by Burundi, which has a structural deficit in maize production.
Maize exports from Ethiopia to Somalia were above average as traders released more maize into the markets following average to slightly above-average harvest expectations.
At the same time, higher prices attracted exports to northern Kenya from Ethiopia.
During the period under review (January and March 2023), around 75,000 MT of locally produced rice and re-exports from Somalia were traded in East Africa.
The amount traded was 10 percent higher than the previous quarter but 48 and 11 percent lower than the first quarter of 2022 and the 2018-2022 average of the first quarter.
Approximately 67 percent, 19 percent, and 14 percent of the total exports corresponded to Tanzania, Somalia, and Uganda. Uganda, Ethiopia, and South Sudan accounted for 34 percent, 16 percent, and 14 percent of the total imports.
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Rice exports from Tanzania to Burundi were above average following Burundi’s lifting of a ban on grain imports from the East Africa region in 2022.
However, the trade level was reduced in other corridors due to tight supplies from Tanzania, a major exporter, before the main harvest from May through August and the availability of grain supplies from the December to February harvest in the destination countries.
Source: The East African