Farmers hold on to their gain, other rush to supply.

August 16, 2018

Farmers in most production locations rejected any intending buyers that interfaced with them offering a price lower than Ugx,500/kg. They held onto their grain saying that government had announced maize buying price at Ugx.500/kg farm gate price. This situation forced the maize market price in Kampala up last week on Friday 10th August from Ugx.410/kg to Ugx.450-460/kg. Less maize grain was supplied to the city, however, by Sunday 12th August, an overwhelming supply drove the market price low to Ugx.430/kg to date.

When Grain Council of Uganda members were contacted, they made a noted that the money was not yet accessed because there is a procedure for acquiring this money. Therefore the farmers out there ought to wait and sell at a better price and advised them to wait until the fund is secured.

The situation at the border produce market in Busia was similar when the maize price slightly increased from Ksh.11/kg to Ksh.13/kg (Ugx.474). The demand for maize is present and an estimate of 800Mt were ferried daily across mainly because Ugandan maize was cheaper than the Kenyan grain.

Farmers in their associations in Masindi congregated and committed to pool funds in order to bulk the surplus maize that is laying in their gardens. This decision was reached when they were presented with very low grain price at Ugx.200-250/kg.

This farmers ‘ association intend to bulk all this grain in the huge space that belong to the cooperative and expect to sell at a better price in the near future beyond what government had earmarked to buy. In a related issue it was noted that beans were sold cheaply in several stores around Masindi town compared to farm gate price offered in production areas nearby such as Pakanyi. It started with the disagreement between the traders and farmers. It appears the farmers were selling to transit traders from far probably Kampala.

Farmers offered to sell their beans at farm gate price of Ugx.1800/kg while at the stores in town a kilo of the same beans was sold at Ugx.1400/kg. This was a move by the farmers to disconnect from the stockiest/ traders and sell at their premises. It‘s not certain how long this will go on. Other commodities harvested and in plenty included Super rice at Ugx.3500/kg, cassava chips at Ugx.700kg and groundnuts at Ugx.2200/kg.

Towards the weekend, the grain price in Kampala drastically increased from Ugx.410/kg to Ugx.450-460/kg. The market in Kampala was noted not to have received maize as usual at the close of the second week of August rendering a shift in price. There was a claim that farmers and rural traders did not deliver maize to major market because they were holding on to their crop until they received the announced government purchase price of Ugx.500/kg at farm gate.  Speculation had it that the grain price would increase rapidly because of the restricted move to sell below Ugx.500/kg.

In Mubende farmers were holding on to their crop, however, the prevailing price was still Ugx.300/kg. Other commodities offered for sale included beans at farm gate price of Ugx.1000/kg. Rice and groundnuts were offered at Ugx.3500/kg and Ugx.3800/kg respectively. Coffee was noted off season.

Kabale and Rukiga received their beans supply from Ntungamo district. Both mixed and single color beans were offered at retail Ugx.1400/kg. The groundnuts price declined in Kabale because harvesting was reported in Ntungamo and Rukungiri districts. A kilo cost Ugx.2800-3000 at wholesale. Maize was obtained from Kasese at Ugx.300/kg and milled in Rukiga by the only 2 mills in the district.

Livestock farmers in Rukiga decided to form a cooperative society and seek to acquire a cooling unit in their district. They have invited the agricultural minister in a drive to raise this unit. They have been delivering their milk to Ntungamo where there is a better collection facility. With this unit they will not have to travel to Ntungamo anymore.

It is demonstrated that over the last few years the maize price in Kampala has been increasing until June 2017. The peck was last year when the grain price recorded Ugx.1600/kg at wholesale. Some factors were noted to have caused this increment, such as effect of fall arm worm and dry weather that reduced maize supply drastically.

Likewise the price slump experienced was attributed to above normal rainfall received during 2017-2018.The grain price hike that had maize at Ugx.1000/kg farm gate in some traditional maize growing locations, excited several farmers into production of the crop in the hope of catching such a high price the following year.

It is unfortunate that maize price is at its lowest which could induce losses to the farming community, however, there are indications that the grain price could increase in the next season harvest as early as Feb, 2019.

The disappointed farmers are likely to quit maize farming hence reduction in maize production.

In some areas (Karamoja) the above normal rainfall affected this year’s season rendering the community food insecure at household level without enough food by September-November because the crops were swept away by the floods.

The large refugee community in West Nile and parts of Sudan would require W.P.F to increase its purchase. All these facts might affect the grain price upwards by the end of the year.

Farmgain Africa.

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