Monday, July 26, 2004
Tanzania, Uganda, SA to Cash in on Kenya's Famine
By CHRIS MBURU
SPECIAL CORRESPONDENT
TANZANIA, UGANDA and South Africa will be the main beneficiaries of a 25 per cent, three-month duty waiver on maize imported into Kenya, which is facing a shortage of 360,000 tonnes of maize.
Wholesale prices of dry maize hit a new high of Ksh1,650 ($21.2) per 90-kg bag in Nairobi last week even as Agriculture Minister Kipruto arap Kirwa announced the duty waiver to ease maize imports in light of a devastating drought that has ravaged the country, leading to widespread famine. President Mwai Kibaki has declared the famine a national disaster.
Mr Kirwa ordered the National Cereals and Produce Board to start buying from local farmers at Ksh1,400 ($18) per 90-kg bag, the same prices as that of imported grain at Mombasa. He suspended the 25 per cent duty on imported maize up to September 30.
While normal to above normal maize output is anticipated in western Kenya and the North Rift, well below normal output is expected in the lowlands of the Coast, Eastern, Nyanza and Central provinces due to poor rains. Nearly 80 per cent of the crop was lost in the Coast, 70 per cent in Eastern and 40 per cent in Nyanza and Central provinces.
Delayed harvests in 2004, coupled with previous national deficit in Kenya have kept maize prices in the country rising and much higher than in Tanzania and Uganda. Prices of maize in June in Nairobi were 95 per cent and 39 per cent higher than Dar es Salaam and Kampala, respectively.
This has continued to attract cross-border maize imports into Kenya from Tanzania, to the magnitude of 10,000 tonnes per month.
Between June 2003 and April 2004, about 100,000 tonnes of maize from Uganda was exported to Kenya, with Uganda's traders attracted by the higher prices, according to the Regional Agricultural Trade Intelligence Network (Ratin).
Ratin says Tanzania has projected a food surplus in the 2004/05 market year, but with pockets of food insecurity in the central, Lake Victoria Basin and northern areas.
East Africa�s first major maize harvest in 2004 started in the lowland southern Tanzania grain basket regions of Iringa, Mbeya, Rukwa and Ruvuma in late May and early June, peaking in July.
These areas account for 21 per cent of maize produced in East Africa and 60 per cent of Tanzania�s maize production. Just like in June to August 2003, southern Tanzania maize is already flowing to Nairobi, Mombasa and southeastern Kenya at higher competitive prices.
As Uganda�s tradable stock of maize harvested in late December 2003 and early January 2004 declines, Uganda�s maize prices have been rising as well.
From June 2001 to May 2002, wholesale maize prices in Tanzania were pushed up by high demand in the southern African countries of Zambia and Malawi which experienced drought, and the Democratic Republic of Congo.
South Africa�s 2003/04 white maize crop is estimated at 4 million metric tonnes, compared with 6.4 million tonnes in 2002/03. The decrease is due to an 18 per cent decline in the total area planted for both white and yellow maize because of drought early in the season and low price expectations.
With an estimated domestic 2004 consumption of 4.5 million tonnes and carry-over stocks of 1.9 million tonnes from the 2002/03 season, the country is expecting to export 1.4 million tonnes of white maize. With duty lifted the ex warehouse price of South African maize at Mombasa is approximately Ksh1,540 ($231) per tonne and Ksh1,695 ($254) per 90 kg bag in Nairobi.
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