East Africa: Limited Supply to Keep Maize Prices Up in Region

maize

Maize supply in East Africa is expected to remain restricted up to July 2018 due to Tanzania banning export of the grain to neighbouring countries.

The Famine Early Warning Systems Network (FEWS NET) has projected maize prices in Kenya, Somalia, Rwanda and Burundi will remain above average until July next year because of this restriction of the grain in the regional market.

FEWS NET said the estimated price of a kilogram of maize will be Ksh55 ($0.55) in Nairobi and Rwf375 ($0.44) in Kigali with grain's cost remaining above average in deficit countries.

Ethiopia, Tanzania and Uganda are usually surplus maize producers. However, the quantity of maize exported by Uganda could decline due to concerns about reduced crop production due to the fall armyworm infestation.

The pest has impacted areas in Kenya that produce majority of the country's maize. Some 200,000 hectares have been affected by the pest this year, resulting in losses of $122.6 million, according to estimates from the State Department of Agriculture.

As a result, the country's long rains maize production is estimated to be approximately 2.3 million metric tonnes, representing a decrease of 20 to 30 per cent below the five-year average.

Exports from Ethiopia to Kenya are expected to increase due to market promotions by regional trade organisations and Kenyan traders.

FEWS NET's regional maize supply and market outlook report for July 2017 to June 2018 shows Kenya, Somalia, Rwanda, Burundi and South Sudan face deficits, with Kenya having the largest deficit.

Maize exports from Tanzania to other countries in the region are expected to remain below average due to an export ban following high prices, increased demand and below average production for a second consecutive year.

South Sudan and Somalia are projected to maintain dependence on imports and food assistance for maize and other staple foods. In Burundi, the worsening economic situation is expected to lead to continued depreciation of the Burundian franc.

In South Sudan, maize prices are expected to remain high through January 2018 due to fear worsening insecurity.

"Maize prices are expected to be higher than previous years because of protracted conflict and the persistent worsening of economic situation," said FEWS NET.