Posted on September, 28, 2018 at 10:16 am
George Kebaso
Do not whet your appetite for Sh75 maize flour (unga) yet as controversy is boiling over the directive. On Wednesday, Agriculture Cabinet secretary Mwangi Kiunjuri, while meeting small-scale millers under the auspices of United Grain Millers Association (UGMA), announced a 2kg packet should not retail for more than Sh75 because the country was experiencing a maize glut and a bumper harvest is expected in coming weeks.
Kiunjuri said based on current realities in the market, retail prices of flour should not go beyond that price.
“I would like millers and traders to do the responsible thing: bring down the retail price of 2kg packet of Unga to not more than Sh75,” Kiunjuri said warning that the government will not allow traders to exploit consumers.
But his order was met by criticism yesterday by Cereal Millers Association (CMA) — that comprises large-scale processors — and Retail Trade Association of Kenya (Retrak) claiming they were not consulted over the directive.
Officials of the two associations say they heard of capping of unga prices through the media.
“We were not consulted,” a source at CMA said in a terse response when contacted by People Daily.
CMA — whose membership comprises companies such as Mombasa Maize Millers, Unga Ltd, United Millers, Grain Millers Ltd and Kitui Flour Mills — controls 30 per cent of the flour market while small-scale millers control the rest.
Retrak said its members pricing is guided by millers and they had not received any communication on the directive.
“Our prices are recommended by millers. We only heard of the order in the news. We are speaking with millers and the ministry about it,” Retrak chief executive officer Wambui Mbarire told People Daily adding that members of the association were not aware which of the millers’ association had struck an agreement with Kiunjuri.
“We have two Unga millers’ associations in Kenya, but we do not know who Kiunjuri agreed with,” she said.
She said making such policy announcements that affect food supply in the country without consulting widely distorts market operations.
Wambui said slashing unga prices when outlets have old stock on their shelves which they bought at higher prices would result in losses.
“It is important to make consultations before making any announcements. Let us not forget that we operate in a free market and prices are determined by millers,” she added.
Wambui explained that the current price discrepancies of maize flour in the market are determined by sources of maize.
She said that currently prices are oscillating at between Sh85 and Sh110 for leading brands.
During the meeting with Kiunjuri, UGMA chairman Peter Kuguru said millers will sell maize flour to retailers at not more than Sh800 per bale translating to Sh67 per 2kg packet. Currently a bale is retailing at between Sh984 and Sh1,004 translating to Sh82 and Sh92 respectively.
Source: Business Daily