Prices on maize flour set to shoot as subsidy programme ends

The cost of buying a two kilogram packet of maize flour is expected to shoot to Sh120 by November due to the end of a four- month maize subsidy programme by the government.

This is set to rise the cost of buying a 90-kg bag of maize by the maize millers to an average of Sh3400, forcing them to increase flour prices by Sh30 from the current Sh90.

At the same time pressure on inflation is set to be experienced among Kenyan citizens, which fell to 7.06 percent in September, from 8.04 per cent a month earlier, pushed by a fall in some food prices.

The staple has a big effect on the cost of living measure and food index, which has a 36.04 per cent weight in the goods used to calculate inflation.

Kenya announced a Sh6 billion subsidy on maize imports on may 16 this year in order to ease the cost of buying maize flour which had risen due to prolonged drought and poor planning.

The subsidy lowered the price of a 90-kg bag of maize to Sh2,300 from above Sh4,000 with taxpayers offering importers a difference of about Sh1,700.

This has kept the cost of the two-kg packet of flour at Sh90 from a high of Sh153 in April.

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