Concern as maize flour prices soar

Dar es Salaam. Consumers of maize flour are forced to dig deeper into their pockets as the price of the staple has soared on account of scarcity, traders say.

A random survey conducted by The Citizen in the nation’s largest metropolis Dar es Salaam yesterday established that a 25-kilogramme bag of maize flour was being sold retail at between Sh31,000 and Sh34,000, up from less than Sh30,000 last month.

One kilogramme of the commodity was being sold at between Sh1,400 and Sh1,600.

However, the price increase does not mean scarcity of the flour as claimed by some traders. Maize flour was found in abundance in the retail outlets surveyed!

The price increase is generally considered to be the result of demand and supply forces at play, as the relevant authorities continue to issue maize export permits to neighbouring countries.

“We are beginning to notice something of a shortage of maize supplies while the demand isgrowing. As a result, prices are going up in the market,” said a trader at the Manzese suburb market, Mr Tabrani Kinoji.

“The challenge is that maize is in the hands of middlemen (and women?) who bought large quantities from farmers. Then they strategically offload their stocks – and this adversely affects supplies,” he added.

According to him, maize was trading at below Sh800 a kilo last month.

According to the central Bank of Tanzania (BoT), maize prices had increased by 7.8 per cent between July and August this year.

Wholesale prices reached Sh66,110.5 for a 100kg bag – the highest price in the last 14 months. On an annual basis, maize prices had increased by 63.2 per cent in the year to August 31, 2019.

“We are now in ‘free market mode,’ and the government had already announced that it will not interfere in dealings between farmers and traders. The government can only buy and supply maize through the ‘National Food Reserve Agency’ (NFRA) to areas it believes have serious shortage,” said Mr John Maige, director of Planning at the ‘Cereals and Other Produce Board.’

According to him, free market forces are responsible for the increase in maize prices – and, ultimately, maize flour prices.

“It’s good to do this as the trends will attract investments. Probably, more maize will be produced next season due to the increase in prices,” said Mr Maige.

According to him, the prices may continue soaring until late February when they will be slowed by new harvests expected in the market.

The central bank said Tanzania’s food supply is adequate, following good harvests in the 2018/19 food crops season.

The food supply is estimated at 16.4 million tonnes, above the national food requirement of 13.8 million tonnes, BoT says – adding that the supply situation is expected to improve in the remaining period of 2019/20, because of satisfactory food production in most parts of the country.

However, some regions are said to face food shortages due to rainfall challenges.

“The consistent increase in prices of maize was on account of high demand in domestic market, following production shortfalls experienced in Arusha, Kilimanjaro and Tanga Regions – as well as in neighbouring countries,” stated the BoT in its September monthly economic review.

The three regions received seasonal rains estimated at about 40 per cent below average.

In July this year, the government announced that it would supply one million tonnes of maize and maize flour in 12 months to neighboring Kenya to bridge a shortfall.

The Government also said that Tanzania started exporting maize to Zimbabwe under an agreement to supply a total of 700,000 tonnes of the commodity to that country