Kenya is set to send a team of inspectors to India with the aim of ending along standing wheat import ban from the Asian nation amid low global supply.
In an exclusive interview with the Star, Cereal Millers Association (CMA) CEO Paloma Fernandes revealed that a team from the Kenya Plant Health Inspectorate Services (Kephis) will be heading to India to conduct a proper risk analysis on the wheat to see if the ban can be lifted.
This is expected to cushion consumers against the high prices propelled supply glitch orchestrated by the ongoing Russia-Ukraine crisis. The two nations are among the biggest world wheat producers.
Kenya banned wheat imports from India due to the fungus Tilletia Indica or Karnal Bunt (KB).
" Kephis is currently working on a team that will be going to India to study the situation and consider allowing Indian wheat,” Fernandes told the Star.
Kenya ordinarily imports over 60 per cent of the wheat supply from Russia and Ukraine combined and is currently experiencing a shortage because of the crisis in the two warring nations.
This coupled with the ban on Indian wheat, the world's second-biggest wheat producer has spiked wheat prices that consumers are starting to ditch the grain from their diet.
“Purchasing power for wheat flour has reduced due to the high prices occasioned by the current global scenario. Wheat milling capacity has reduced in tandem with the reduced purchasing power,” Fernandes said.
Local rice, manioc flour and sorghum are substituting for wheat, which has spiked about 40 per cent this year as Russia’s invasion squeezed exports from Ukraine, one of the biggest shippers.
“There is a spike in the price of maize and wheat driving consumers to other alternatives. Pulses and rice sales are growing, while wheat is coming down,” Unga Group MD Joseph Choge said.
He added that India is the only major supplier of wheat at this time of year, and its exports of the grain have surged since Russia invaded Ukraine in late February.
Due to the crisis, for the last couple of months, global prices of wheat have continued to increase due to the lack of supply to over $580 (Sh67,000) per ton of the wheat being offered in the world market up from an average of $280 (Sh32,000) per tonne.
Indian wheat is significantly cheaper than the rest of the world selling at a discount of about $50-80 (Sh 5,805-9,288) cheaper than world wheat which is at almost over $500 per tonne.
The millers have also asked the Government to suspend levies and duties to contain the price increase.
“In the meantime, we have asked the Government to waive import duty of 10 per cent on imported to curb escalating prices of wheat products,'' Fernandes said.
The farm-gate price of corn has doubled, and millers are struggling to get enough supplies.
“Prices of maize have gone up from Sh 3,100 earlier in the year to Sh4,100-4,200 currently. That of wheat has gone up from Sh 3,500-3800 to about Sh 5,300-5,500 per bag,” said Fernandes.
According to data from the Agriculture and Food Authority 90 per cent of wheat consumed in the country is imported from mainly Russia and Ukraine. The projected import target was 2.7 million tonnes for the 2021-22 financial year.
The current national annual wheat consumption is 24 million bags against an annual production of about two million. Kenya's key wheat growing zones are Narok, Nakuru, Uasin Gishu, Trans Nzoia, Meru and Laikipia.
The Economic Survey 2022 unveiled on Thursday last week indicates that wheat production decreased by 39.4 per cent from 405,000 thousand tonnes in 2020 to 245,300 thousand tonnes in 2021.
As a result, the amount of wheat imported increased by 6.4 thousand tonnes to 1.89 million tonnes in 2020.
The FAO cut its 2022 outlook for global wheat production, saying the forecast for Ukraine remained below average. The war likely will reduce the harvested area by at least a fifth.