Looming flour shortage as Tanzania freezes maize exports permits to Kenya

Tanzania has halted issuing new maize export licenses to Kenyan traders beginning the first week of September.  

The lack of imports of maize and animal feed from the neighbouring countries, according to traders, might intensify the product shortfall that has caused flour prices to retail at their highest levels ever. 

According to United Grain Millers Association chairperson Ken Nyaga, the action is expected to increase the price of unga and animal products and reduce production, according to the traders.  

Tanzania maintains that the move to limit exports is being made in order to protect its local stock as a result of bad harvests. 

“We have been unable to get maize from Tanzania since last week after the country stopped issuing export permits to traders with the cutting off of stocks from Tanzania expected to push up the cost of flour. Cutting maize supply from Tanzania is expected to increase prices of maize, and millers could transfer the cost to consumers,” Nyaga reiterated. 

Following the decision that has seen manufacturers reduce production, John Gathogo, press secretary of the Association of Kenya Feed Manufacturers, claimed that members are unable to receive goods from Tanzania as well. 

Tanzania has developed into a significant source market for maize in the past two years, particularly since the two nations restored their economic relations with the change in government last year with the passing of former President John Magufuli.  

According to the Eastern Africa Grain Council, imports from Tanzania increased by over five times last year, from 98,000 tonnes in 2020 to 469,474 tonnes. 

Processors are now vying for locally available stocks and a few imports from Zambia as a result of the change.  

The Kenya Bureau of Standards (KEBS) reported that the amount of maize entering the country through the Namanga border has drastically decreased, indicating that imports at that point are coming from Zambia. 

The Sh8 million government subsidy on flour by Kenyan government never lived to its promise as announced ahead of the polls.  

The initial stage saw a 2kg packet of flour fall from Sh230 to Sh100 and after the default, the prices have since doubled to the current price of around Sh210 after the government declared end of the subsidy programme. 

The maize product prices in the market have shot up to between Sh5,600 and Sh6,000 per 90-kilogram bag. Reports further indicate that the neighbouring Tanzania stopped the issuance of new export permits to Kenyan traders earlier in September 2022. 

The sentiments have also been reiterated by counterpart traders dealing in animal feed import from Tanzania who have since been denied country access to carry on the importation process. 

 The move is expected to cut production of the feeds and thus affect the prices of animal products in the market. 

Mid-year 2022, Tanzania doubled the cost of acquiring an export permit from the previous Sh27,000 to Sh52,000 per truck.  

Maize millers are currently going through financial constraints, as the government still owes them the subsidy money and want the government to pay them the production fee incurred in the production of the Sh100 subsidised unga. 

Kenya maize millers stopped the production of maize flour weeks after the government stopped the flour subsidy complaining of price competition in the market after middlemen availed the products hoarded during the subsidy programme.  

They said they cannot compete with their brand and will stop operations until the hoarded flour products are out of the market.