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Bloomberg

Kenya sees July corn harvest, imports keep prices stable

CORNNAIROBI, Kenya, Jun 5 – Kenya may produce 1 million metric tons of corn next month, helping meet demand for the staple food as the country imports and taps strategic reserves to plug a deficit, the Agriculture Ministry said.

The nation currently faces a shortage of 720,000, 90-kilogram (198-pound) bags that will be covered by purchases from the region and the release of 500,000 bags from the national reserve, Principal Secretary Sicily Kariuki said in an interview in the capital, Nairobi. The release of the grain from national reserves is “normal practice,” she said.

“There is provision for enough food in the country and we don’t expect that imports should affect prices,” she said. “There should be no panic of a crisis, we have enough food.”

Kenya consumes 3.72 million bags of corn per month, according to the Agriculture Ministry’s website. Production of the grain dropped after the country was hit by unseasonably dry weather during the March-to-May rainy season.

“The situation may get worse as farmers continue to reduce acreage this season as costs of farm inputs rise,” Standard Bank Plc said June 3 in an e-mailed research note.

Kenya’s annual inflation rate increased to 7.3 percent in May, near the upper limit of the government’s target of 2.5 percent to 7.5 percent. The cost of food, which carries a weighting of 36 percent in the consumer price basket, rose 8.9 percent, according to the country’s statistics office.

A 90-kilogram bag of dry corn sold at Sh3,100 ($35.46) in April in Nairobi, according to the Agriculture Ministry.

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