Kenya's Maize Demand Sparks Price Surge in Uganda

Kenya’s pressing need for maize, driven by a severe drought impacting its primary growing regions, is creating a ripple effect across the border in Uganda. Reports indicate that Kenyan traders are descending upon Ugandan villages with cash, bypassing traditional channels and engaging in direct purchases from farmers. This intensified trade activity, aimed at filling Kenya’s substantial deficit, has significantly driven up the price of maize grain within Uganda.

Local Ugandan dealers and industry bodies are expressing concern over these practices. The Grain Council of Uganda (GCU) highlights that the direct village purchases by Kenyan traders circumvent established value chains, which include crucial steps like drying, cleaning, grading, and aflatoxin testing. This bypass not only impacts the quality of the grain but also undermines Uganda’s long-term competitiveness in the agricultural export market and potentially poses health risks to consumers.

The surge in maize prices has had a palpable impact on the Ugandan market. The cost of a 100kg bag of dry maize grain has seen a considerable increase since January, with prices in markets like Kampala, Mbale, and Busia reflecting this upward trend. Similarly, the price of posho (maize flour) has risen significantly across most Kampala suburbs.

This price hike is disproportionately affecting the poultry and livestock sectors, where maize constitutes a major component of feed. Feed millers are reporting substantial cost increases, forcing many smallholder farmers to scale down their operations. Industry leaders suggest that Kenyan buyers, possessing greater financial resources, are willing to pay above local market rates to secure supplies, thereby setting a higher price floor for Ugandan millers and exacerbating the domestic price inflation.

Source: https://www.monitor.co.ug/uganda/business/markets/regional-demand-local-strain-kenya-s-maize-rush-triggers-price-hikes-in-uganda-5581932