Kenya + 3 more

Food Trade Bulletin for East Africa Sep 2005


HIGHLIGHTS
- Maize quality standards harmonized by the East African Community states.

- Bumper harvest anticipated from the key maize producing areas in Kenya.

- Wholesale maize prices drop in selected producing areas in Kenya.

- Intra-regional trade in maize expected to continue.

PRODUCTION AND HARVESTING

Harvesting in Kenya is in varying stages in most of the two season areas as a good maize production is anticipated from the one season areas. In the South Rift region (Transmara, Kisii, Bomet, Bureti etc), maize harvesting is almost complete while it is about halfway in the lowlands of Western region. 2005 long rains maize production is good in most two season areas except for the eastern lowlands and coastal areas where for the second consecutive year, the production was almost a near- total failure. The bulk of Kenya’s maize will be harvested from North Rift between November and January 2006.

In Tanzania harvesting is nearly completed across the country. In fact, in the bimodal areas, it is being wound up and farmers are already gearing up for the next cropping season to begin around October to November 2005. While in Uganda, maize harvesting continues in the eastern areas.

The report released in August by the crop and food assessment mission team in Rwanda, indicates that an average production from the long rains season was realized. However, there are still some food insecure districts located in the highlands in Gikongoro and Kibuye. This situation may be contained with a good production expected from mid September to early October from the marshlands.

REGIONAL TRADE FLOWS


Figure 1: East Africa current regional maize flow direction


Source: RATIN crossborder monitors

Intra regional trade in maize, beans and rice continues in East Africa with Kenya being the targeted market. Cross border monitors at Busia (UG-KE), Tarakea, Holili, Namanga (TZ-KE) , Mutukula (UG-TZ) and Gatuna (UG-RW) reveal that there is increased regional flow of maize, beans and rice since June 2005. The cross border data show that during the month of August a total of 14,532 MT of maize, 5,287 MT of beans have moved from Uganda into Kenya through Busia border, while another 2,119 MT of maize has moved into Rwanda through Gatuna. From Tanzania, about 14,000 MT of maize, 900 MT beans and 3,000 MT rice have been imported into Kenya through Holili, Namanga and Tarakea while no maize have gone to Uganda through Mutukula border.

This current situation is seen to continue till after the second half of October when we expect to see a decline in imports after harvesting starts in the grain basket (North Rift) of Kenya. In fact, already at Isebania border, the quantity of maize and beans exported to Kenya has reduced to 400MT since July from a total of 4000 MT in May and June following the South Western harvests that started sometimes in late August.

The relatively cheap Uganda maize and beans exported into Kenya through Busia is destined to several areas among them, Western lowlands (Kisumu, Siaya, Bondo), eastern lowlands (Machakos, Mwingi, Kitui, Makueni, Embu) areas. While that of Tanzania coming into Kenya through Taveta and Lungalunga is mainly destined for the coastal area and Eastern lowlands. Details of the current maize flow as of august are shown by figure 1.

Regional Price Analysis:

Wholesale maize was selling at an average of USD 137, 145, 209 and 230 per metric ton in Dar es Salaam, Kampala, Nairobi and Kigali respectively. Compared to the same period last year, maize prices were lower in Dar es Salaam and Kampala. Low prices in Dar es Salaam and Kampala can be attributed to the good maize production realized during the production year. The relatively high maize prices in Kenya since the last two years are due to the consecutive below normal production achieved. As we anticipate a good production from North Rift after the second half of October, maize prices are set to fall during the last quarter when harvesting begins.

POLICY- EAC MAIZE GRADES AND STANDARDS HARMONISED

The East African Community Customs Union signed by the presidents of Uganda, Kenya and Tanzania on March 2nd 2004, was implemented on 1st January 2005. The customs union establishes a single trading territory where duties levied on goods and services traded between partner states will be eliminated in five years in the backdrop of a uniform policy on import charges from outside the region. Before the implementation of the custom union, tariffs, grades and standards, safety requirements and packaging of maize and beans varied from country to country.

The absence of a harmonized maize grades and standards was a major non tariff barrier to regional trade expansion. For this reason, RATES supported several meetings and consultations among the three member states to have common maize quality standards for East Africa as well as an EAC trader’s guide book. The maize grades document specifies only two maize grades, grade 1 and 2. Each of the grades must have a moisture content of at most 13.5% while the level of Aflatoxins must be in accordance with ISO 16050 (10ppb incl. max 5 ppb B1). Consequently, this arrangement will make it easier for traders in one country to deliver consignments directly to buyers in another country. The table below outlines the newly agreed maize quality standards for east Africa.


Table 1: Maize Grades
Defect
Maximum limits
Grade 1
Grade 2
Foreign Matter, % m/m
0.5
1.0
Inorganic Matter, % m/m
0.25
0.5
Broken grains, % m/m
2.0
4.0
Pest damaged grains, % m/m
1.0
3.0
Rotten and Diseased grains, % m/m
2.0
4.0
Discloured grains, % m/m
0.5
1.0
Moisture, % m/m
13.5
13.5
Immature/shrieved grains, % m/m
1.0
2.0
Filth, % m/m
0.1
0.1
Aflatoxins in a accordance with ISO 16050
10 ppb incl max 5 ppb B1
10 ppb incl max 5 ppb B1
Total defectives grains, % m/m
4.0
5.0
Source: Kenya Bureau of Standards (KEBS), Maize (grains)-Specification book

Information used in this report came from:1) FEWSNET -Kenya, Uganda, Tanzania and Rwanda 2) Ministry of Agriculture in Kenya, Tanzania and 3) Cross border monitors and traders.

RATES, RATIN Office: Bridget Okumu ratin@ratescenter.org, www.ratin.net Tel. 254 20 4212245.