The National Cereals and Produce Board (NCPB) has increased the buying price of maize by Sh300 in a second review in two weeks, setting the stage for expensive flour.
NCPB will now pay Sh3,000 for a 90-kilo bag from Sh2,700 as the state corporation moves to attract more stocks in the wake of stiff competition from traders and millers.
The new price will force millers and traders to increase the cost at which they are buying the produce from farmers in order to get sufficient stocks from growers.
The increase in the cost of maize, which forms 80 percent of the total cost involved in the production of flour, will add pressure on the price of flour, which is already trading at a high of over Sh100 for a two kilogramme packet.
“The price of Sh3,000 we are offering will enable farmers to get value for the maize they deliver to us,” NCPB managing director Joseph Kimote said.
Traders are at the moment paying Sh3,000 at the farm gate, the highest cost to have been achieved in the last three years.
Millers have already raised concern over the high cost of maize in the market amid a shortage of supply as farmers are not releasing their stocks in anticipation of good prices in the coming months.
A week ago, the millers wrote to Agriculture Cabinet Secretary Peter Munya warning of an impending increase in the cost of flour owing to the high cost of maize in the market.
Mr Kimote said the payment for maize delivered at the NCPB depots will be done within 24 hours of delivery.
The board is purchasing the maize for its commercial function, marking the second year that the agency is buying the produce under this scheme.
“There are no administrative conditions for one to deliver maize to the Board as long as the produce meets Kenya Bureau of Standards grade I and grade 2 standards,” he said.
The MD said the board is also offering storage facilities at competitive rates and farmers can opt to store under the Warehouse Receipt System or under regular warehousing.
In addition to offering storage services, the board also offers other grain post-harvest services such as grain drying, cleaning, grain grading and aflatoxin testing.