Uganda maize price may drop as Kenyans avoid processed maize

There is a looming fall in maize prices amidst an expected good harvest this season

Kampala, Uganda | URN | There is a looming fall in maize prices in Uganda amidst an expected good harvest this season due to good rains. But, the market remains subdued according to both farmers and exporters due to increasing preference of raw grain by the regional markets.

Uganda’s smallholder farmers produce 90 per cent of the country’s total output of 2.5 to 3.5 million metric tons per year, although this total fluctuates depending on weather, according to the Uganda Bureau of Statistics (UBOS).   

Of this, more than half is consumed on the farm, or by the 2.4 million households that grow maize, leaving the surplus for sale locally and export.  The country was starting to recover from one of the lowest prices ever when a kilo at the farm sold for 200 Shillings last year.

Rose Omaria, the proprietor of Soroti Grain Millers says that while the borders were left open for cargo trade, during the COVID-19 lockdown, the long delays at borders due to the health restrictions further slowed down trade.   

However, the industry is also hit by other export market challenges, like rejections on grounds of low quality.  While Uganda is the region’s only consistent surplus producer of maize grain, it has always found problems accessing markets including the largest grain market, Kenya, which had a shortfall of 12.5 million 50-kilogram bags.   

The farmers and exporters are told that those countries demand better quality maize, which Uganda hardly meets.  Omaria and John Opio, the Chief Executive of Katine Joint Framers Cooperative Society in Soroti, say they their farmers have big stocks from last season, yet they will soon start harvesting for this season.   

Despite these challenges, dealers from other countries are increasingly going directly to farmers in Uganda and buying unprocessed grain and taking it out, leaving the processed and packed products on the market. These informal trade practices have even made it difficult for the authorities to tell how much Uganda is actually exporting in cereals.   

Justine Namubiru, the project manager at the East African Grain Council says the foreign dealers do not trust the handling and processing standards by Ugandans and so they prefer to involve themselves right from the farm to the markets. 

The Uganda Grain Council disagrees with this position saying instead that the regional dealers just take advantage of Uganda’s laxity in protecting the local industry, and so find it easy to manipulate the market. Henry Musisi the Executive Director of TUGC says the Kenyans and other dealers find it cheaper to reach the poor farmers and underpay them.   

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He says they are fighting to ensure that grain is protected like coffee which was banned from being exported raw. But he also says the East African Community Common External Tariffs in place are supposed to protect the maize producers, but the community is disinterested because Uganda is the only country affected.   

The Trade Ministry Commissioner for External Trade Godfrey Mutahunga says that the main important thing is for Ugandan producers to abide by the standards that are now harmonised for the whole region, as process authorities review the performance of the tariffs.