Maize price drops as new supply intensifies.

July 2, 2018

Newly harvested maize reached Kampala market and as expected the market price deteriorated to Ugx.610-620/kg. This grain was delivered from Kiboga, Kyankwanzi, Kibaale and Kisiita contrary to what has usually come first from Busoga region. It is believed that the yield will be very good similar or better than last’s because the rainfall distribution and availability was very good.

In the previous week the market price increased by Ugx.10/kg registering the seasonal peak at Ugx.710/kg for season B 2017. The quality is not yet good because the grain is not well dried with high content levels above 15%-18%.

Apparently in Iganga, the new maize was offered at Ugx.500/kg comparably higher than the current supply locations of Kiboga, Kibaale and Kyankwanzi at Ugx.300-400/kg at farm gate price. The market price is expected to decline further in the next weeks until the quality is well dried.

Grain price is expected to fluctuate when the large grain buyers’ intention to purchase is opened and the volume they intend to buy can only influence the price higher. When institutions such as WFP, Prison/Police, Exporters, start purchasing the market price gets better.

The regional grain trade will most likely be good this season especially via Busia to Kenya given the low maize price currently, however, volumes exported to Kenya will be determined by how much grain they have at their disposal. Kenya is a net importer of maize grain because they consume more than they produce. The traders have a threshold above which they can’t buy maize from Uganda other factors constant and would rather import from elsewhere given their buying price.

First grain trading was registered at Busia border post as the time “zeroed” into the new financial year (1st July, 2018) the date slated for implementing new levy. Several traders on both sides of the border transacted fast because they were uncertain about what the new taxes on products would present.

Over 500Mt of maize grain was bought daily throughout the week. An equally high volume of assorted beans estimated at 700Mt were purchased daily. This apparently was followed by a near to closure of business as traders were not excited about changes so far existing as the market opened in the new month of July.

On Monday morning, 2nd July, 2018, traders were seen in a slowdown situation with loaded trucks packed with no intention to sale. They are yet to calculate what the new taxes will manifest in terms of kilogram sold to their counter parts in Kenya. Communication from Customs Uganda had not yet filtered to the produce traders’ association about the same.

Farmgain Africa

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