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Trade Bulletin

Maize export from East Africa now drops

Export of maize from the region in the last quarter dropped by 16 per cent because of a decline in supplies from Uganda.

Uganda exported a total of 59,545 tonnes of maize to Kenya between March and June down from the 87,282 tonnes exported between January and March.

Tanzania exported 49,421 tonnes to Kenya in the second quarter, down from 76,723 tonnes in the previous period.

“Maize prices in Kenya were still attracting supplies from Uganda and Tanzania even though they were lower than in the first quarter,” states the East Africa Cross-border Trade Bulletin.

The drop in trade volumes has also been attributed to modest carryover stocks from past year in some countries, increased harvest and currency depreciation.

Volumes of sorghum traded in the region for the past three months also dropped because of increased local demand in Uganda, the main producing country. However, refugees from South Sudan and breweries increased demand for the product.

Trade in rice — both locally produced grain and re-exports from Somalia — increased in the second quarter 2018 increased, attributed to large stocks and relatively lower prices due to lower prices of its substitute maize flour.

Somalia exports its rice to Kenya and Ethiopia whereas Tanzania is the main exporter of rice to mostly Kenya and Rwanda.

Rice exported to Kenya from Tanzania increased from 22,792 tonnes to 23,269 tonnes and to Rwanda increased from 13,738 tonnes to 19,341 tonnes during the period.

“The absence of punitive tariffs by other East Africa Community countries due to reduction in mixing of locally produced Tanzanian rice with imports from Asia to circumvent the East Africa Community Common External Tariff while re-exporting the Asian rice was a factor,” states the bulletin provided by Eastern Africa Grain Council.

“Attractive prices in some markets in Kenya, Uganda and Rwanda where the Tanzanian rice is preferred because of its aroma and high water absorption that makes it swell, also led to the rise in volumes traded,” added the bulletin.

The cross-border data analysis predicts that maize production in Kenya will to hit a five-year high due to favourable rainfall, especially in maize producing areas in Rift Valley and some southwestern and eastern agricultural areas.

“The gap, which is usually filled from regional imports, is expected to be slightly lower than in the 2016/2017 marketing period,” states the report.

Maize prices are expected to decline in Kenya and Rwanda compared to with the same period last year due to better production.

Currently, Uganda is in middle of its maize harvest of the year which is expected to keep prices lower.

The analysis reveals that maize prices are expected to fluctuate between $280 and $300 a tonne are Kenya from August to March next year.

In Uganda, the price will drop from $120 a tonne in August to $100 in January. Maize price in Rwanda is expected to plateau at $250 a tonne.

“Maize exports from Ethiopia to Kenya are likely to be subdued due to better production in Kenya, and stiff competition from Ugandan and Tanzanian supplies, whose production areas are relatively closer to the main consumption markets in Kenya, or have comparatively cheaper transport costs,” states the bulletin.

Maize prices are highest in Juba and are expected to go as high as $550 a tonne, mainly due to high transport costs that are attributed to to high fuel prices.

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