New rules formed to govern wheat imports

July 14, 2008 12:00 am

, NAIROBI, July 14 – Agriculture Minister William Ruto has formulated rules governing the importation of wheat flour, which are set to apply in relation to the quantity as specified under the Mutual Tariff Concessions for the Common Market of East and Southern Africa (COMESA).

In a schedule published in the Kenya Gazette last Friday, Ruto spelt out the rules that are likely to bring sanity in the well perforated market.

In the new rules, auction on rights to import wheat flour under the COMESA tariff concession will be open to all interested persons, for the expression of interest.

The Agriculture Minister indicated that the participation in the auction shall however be via catalogue only.

Those intending to participate will be required to purchase the catalogue at a cost of Sh200,000 which will be deposited at the Ministry offices in Nairobi, after which a receipt will be issued.

The deposit would be in form of a Banker’s cheque and would be addressed to the Agriculture Permanent Secretary.

“The rights to import shall be sold in lots of one thousand tonnes each,” the rules stated.

It also stated that the bid price of each shall be determined by the difference between the former warehouse price of a given quality of domestic wheat flour and the cost of insurance and freight, together with port handling charges for an even quantity of imported wheat flour.

The highest bidder in these new rules is considered to be the person offering the largest margin in the bid process.

“A successful bidder shall be required to pay the full amount of the bid price less the deposit paid, within 14 days of the winning bid, failure to which the bidder shall forfeit the bid and the deposit paid,” a paragraph in the new rules read.

The new rules however bestow all the regulatory rights to the Ministry, which would be expected to accept or rejects bids and fix the minimum bid amount.

These rules come against the backdrop of a recent tax waiver on imported wheat which players feel was a relief for consumers of the grain and its products.

The Agriculture Minister announced the reduction from 35 percent, in line with a regional initiative to harmonise import duties on goods entering the East African Community’s (EAC) common market.

Kenyan millers, however, have been pushing for total elimination of the tax, saying it was the only way that would enable them compete in the regional wheat flour market.

Uganda levies zero-tariff on the commodity and the survival of farmers there is threatened by cheap imports. Tanzania levies import duty at 10 per cent.


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