An increase in the supply of maize boosted by a bumper crop harvest has lowered the costs of flour by as much as 50 per cent from January's prices, easing pressure on household budgets for the staple.
According to Agriculture ministry data, the average price of a 90 kilogramme bag of dry maize has dropped 92 per cent from a high of Sh2,700 in January to a low of Sh1,400 in November.
This has seen competing millers who are buying the dry maize at the low prices reduce the costs of their final products by as much as 80 per cent for some brands of maize flour.
The price of a two kilogramme packet of maize meal flour which was selling at a high of between Sh90 and Sh100 in January is now at a low of Sh53 for some particular brands.
A spot check by Business Daily shows that most brands such as Pendana, Jimbi, May Corn, Pembe, Jogoo, Kifaru, Ndovu, Cosmo, Mpishi, Jembe and Cateress are selling at between Sh60 and Sh70 per packet in Tuskys, Ukwala and Uchumi.
The Shujaa brand is the cheapest, selling at Sh53 while Njema and Mpishi are selling at Sh55. The Soko brand is selling at between Sh59 and Sh65.
"The prices have drastically come down because of the rains we have had. We have also had volumes that have come from Uganda that has continually had a bumper harvest as it is a major source of maize for this country," said Jackson Kiraka, research analyst, East African Grain Council (EAGC).
"The long rains have been better in the country. I have heard of traders buying at lows of Sh1,200. This has changed prices and we do expect them to remain at that range because the harvests have been very good," he said.
"The consumer is not complaining...the person complaining is the farmer who has a lot of maize to sell but cannot find a market. That is why we are promoting the warehousing system so that the farmers can get better prices when the prices are better for them in the market," he added.
"Right now there is an oversupply of maize and all that the farmers worry about is their maize going bad so if you promise them cash on delivery you can be able to negotiate the prices," said an employee of Alpha Grains Millers Limited who requested anonymity as he was not authorised to speak to the press.
"Our company is relatively new but we bought our dry maize in bulk last month at between Sh1,400 and Sh1,450 but this went up to Sh1,600. Now hear that the prices have come down again to Sh1,400" he said.
Samuel Magura, an employee of Cateress Milling Company Limited that makes and markets the Mpishi and Cateress Maize Meal brands said that companies are also matching each other's prices as millers look outdo each other in an effort to gain market share.
"The prices of our products have been coming down but we also set our prices in comparison with other millers" he said. "Sometimes it is better to make a slight loss but move our products so we also look at our competitors. If the price of dry maize goes down our competitors will also reduce their prices and we will also reduce ours," he added.
The prices had hit their highest peaks following a drought that lasted through the end of last year.
"This is the peak season for harvests in the North Rift and if there is no other intervention the prices should remain as they are right up to February next year. During the high harvest period there is a lot that is put into the market," said David Nyameino, chief executive officer, Cereal Growers Association. "As far as I am concerned nobody is exploiting the other at the moment and my prayer is that the weather remains favourable," he added.
Millers and other industry players said that during periods of low maize prices ,brokers sometimes form cartels to try and push their prices higher but that they did not expect the prices to edge higher in the near future until the peak harvest season ends unless the la nina phenomena brings a dry spell which may result in low maize yields from farms.
"Brokers go for one major miller and negotiate a higher price. Millers then think that prices are going up because the brokers want to take advantage and since they have bought the dry maize at a higher price they also adjust their prices upwards" said the employee from Alpha Grains Millers Limited.
Mr Kiraka said the low prices could remain through the first quarter of the year.
"Because we have had better harvests in Uasin Gishu the scenario in my own estimation is likely to remain steady till around February or March. Millers had also imported a lot last year during the problems we had and part of it was a carryover of these supplies" he said.
