Nairobi plans to cap the price of local wheat at Kes5200 a bag and curb exports to contain the cost of wheat based products like bread and chapati in the country after Kenya lost access to Ukraine and Russian grain on end of the Black sea deal.
Crop Production PS Kello Harsama has said the government has agreed with millers to buy all local produce before they can start importing 2 million bags to plug the deficit at a lower duty of 10 percent through a 2010 rule.
Kenya misses Russian grain
Kenya foreign policy leanings with the West while skipping Russia Africa Summit has meant the East African country missed out on Russian grain even as Kremlin-backed hackers Anonymous Sudan launched a cyber-war on Nairobi, crashing the country’s mobile financial networks and state websites.
The government expects the price of wheat to soar with Mr Korir Sing’oei, the Permanent Secretary at the Foreign Affairs ministry telling Reuters commodities that used to cost say a pound or two will now cost four, implying prices will just double.
“We expect 1.3 million bags of wheat from next month from our farmers. We have already set a price of Kes5,200 for grade one wheat while grade two will attract Kes5,100,” said PS Kello Harsama during a media engagement over the planned global technology conference, African Conference on Agricultural Technology (ACAT).
He said millers will import two million more bags of wheat to bridge the deficit after the harvest.
Local farmers, who would have seen a windfall from the spike in prices will have to content with getting Kes5,200 for a 100kg bag of grade one wheat and Kes5,100 for grade two. This is the agreement between the National Treasury, Ministry of Agriculture, Cereal Millers Association (CMA) and wheat farmers.
The government wants to revive a 2010 agreement in which millers are under duty to mop up the entire local wheat production before going for imports. The move aims at reducing import duty from 35 per cent to 10 per cent.
Experts project that the prices of wheat will double amidst shortage in supply from other markets following end of the Black Sea Grain Initiative. The deal allowed Russia to allow grain shipments from Ukraine.
Talks on the Black Sea Grain Initiative was led by Turkey and the UN in July 2022. The agreement saw ships carrying fertiliser and agricultural products to leave three Ukrainian ports. As a result, Ukraine managed to ship some 32.8 million tonnes of corn, wheat and other grains since the agreement became effective last year.
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Ukranian wheat donations
Western Nations say over half of this grain went to developing countries, including Kenya. They say the World Food Programme got 313 metric tonnes of Ukrainian wheat in donations. They add that much of that graid left to drought-stricken communities in Ethiopia, Kenya and Somalia.
However, Russian President Vladimir Putin said that over 70 percent of Ukrainian grain exported through the lapsed deal had gone to high or above-average-income countries, including the European Union while the poorest countries received less than three per cent of the shipments.
Putin said Russia was expecting a record grain harvest and was ready to replace Ukrainian grain exports to Africa on both a commercial and aid basis to honour what he said was Moscow’s critical role in global food security.
“We will be ready to provide Burkina Faso, Zimbabwe, Mali, Somalia, Central African Re-public and Eritrea with 25-50,000 tonnes of free grain each in the next 3-4 months,” he said. “We will also provide free delivery of these products to consumers.”
But Kenya may miss out on the Russian grain after Nairobi skipped Russia Africa meeting over geopolitical leaning with the West. President Ruto skipped last week’s summit, choosing instead to be represented by the African Union, according to Hussein Mohamed, the President’s spokesman.