Informal transborder trade contributed to maize shortage

Business Daily Kenya:  Kenya would not have suffered the maize shortage being experienced had it not been for informal transboundary trade ...

Business Daily Kenya: 

Maize farm. Photo/File

Kenya would not have suffered the maize shortage being experienced had it not been for informal transboundary trade of the commodity to neighbouring countries.

A trade officer said yesterday, at a regional agro-industry forum in Nairobi, that Kenyan farmers produced enough for local consumption, but some of it was sold outside the country.

The officer who did not want his name disclosed due to protocol said if Kenya had a commodities exchange in the country the current scenario could have been avoided as the country had produced enough maize but sold to its neighbours.

A commodities exchange is a platform where various commodities, futures and derivatives are traded. The officer said delay by the country to establish a commodities exchange – whose deadline was December last year – saw some farmers in Trans Nzoia, Uasin Gishu and parts of Western Kenya ship out thousands of bags of maize to Ethiopia, South Sudan, and Uganda.

He seemed to confirm a revelation by some farmers who spoke to People Daily on Tuesday that they got better prices for a 90 kg bag of maize as compared to what the National Cereals and Produce Board offered.

The region - especially Ethiopia and Uganda - suffered serious drought last year. Coupled with political instability in South Sudan. These countries ventured into the North Rift region for the country’s most precious grain.

The trade offices said the Kenya-Ethiopia-South Sudan borders particularly the Moyale point, experienced heightened informal cross-border trade in maize.

Common Market for Eastern and Southern Africa Business Council chief executive Sandra Uwera urged governments in the region to come up with risk response mechanisms that do not react to situations such as drought but are prepared in advance.

“In order for the Small Micro Enterprises to meet the buyer requirements in terms of volumes, there is need for aggregation and clustering,” she said.

In June 2016, Industry, Trade and Cooperatives ministry prepared draft laws for establishment of a commodities exchange following a decision by members states allied to the Northern Corridor region. Six months later, the facility, thought to facilitate organised trade in various commodities, has not been established.

The post Informal transborder trade contributed to maize shortage appeared first on Mediamax Network Limited.

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