Kenya’s wheat imports hit Sh35.6 billion last year amid rising concerns by local farmers that millers are overlooking their produce.
The farmers said millers are shunning their crop in favour of imports because oversupply in the international market has driven down wheat prices by more than 30 per cent since last year. This means that millers are enjoying bigger margins from the imported wheat compared to the local grain
“Millers are no longer buying wheat from farmers since their silos are full of imports,” said Mr Anthony Kioko, chief executive of Cereal Growers Association (CGA), a lobby for local farmers. Kenya is a net importer of wheat, producing below 500,000 tonnes against an annual consumption of 1 million tonnes. The farmers’ lobby said hundreds of farmers in the Rift Valley grain basket are stuck with thousands of bags of wheat from last season’s crop because millers’ stores are full.
The Sh35.6 billion imports represent a 5.3 per cent rise from Sh33.8 billion in 2014 and Sh30 billion a year earlier, the Kenya National Bureau of Statistics (KNBS) data shows. GA says imported wheat costs about Sh2, 600 per bag compared to above Sh3, 000 that local farmers need to sell their produce to break even.
Wheat flour prices have slightly changed over the past year with a two-kilo packet retailing at between Sh126 and Sh140 in the supermarkets. Wheat imports grew to 1.4 million tonnes from 1.2 million in 2014 and one million a year earlier. At Sh35.6 billion, wheat was at position nine on the list of Kenya’s top imports, behind animal and vegetable fats and oils whose shipment stood at Sh47 billion.
Wheat, animal and vegetable oils have been on the top 10 list of the country’s imports since 2013.Sector players have faulted the import growth saying that Kenya is agriculture-driven with large tracts of arable lands, which if put to productive use could sharply reduce external purchases and ease pressure on the shilling.
They have previously asked the State to increase import duty on wheat to 35 per cent from the current 10 per cent, to curb inflow of the grain .As part of the country’s food security policy, the government had lowered import duty on wheat to 25 per cent and later in 2010 to 10 per cent to plug shortfall through cheaper imports, expected to lower flour prices. The move was made against the backdrop of high commodity prices globally. Farmers now say the 35 per cent import duty should be re-introduced since prices have reduced.
The Ministry of Agriculture has, however, ruled out any tax increase, saying wheat growers should adopt measures to cut cost of production and remain afloat in the market. “We cannot revise the duty at this time from 10 per cent to an upper figure because we are operating under the EAC protocol that requires concurrence by all member states,” Agriculture CS Willy Bett said in an earlier interview.