CHARACTERISTICS OF MAIZE MARKETS IN EAST AFRICA · The project is working with the IFAD-supported agricultural development projects in the EAC region to accelerate incomes and wealth

CHARACTERISTICS OF MAIZEMARKETS IN EAST AFRICA

CHARACTERISATION OF MAIZE MARKETS IN THE EACAUTHOR: KILIMO TRUST 2017

About REACTSThe Regional East African Community Trade in Staples (REACTS) is a 3 year grant project funded IFAD and implemented by Kilimo Trust. The project is working with the IFAD-supported agricultural development projects in the EAC region to accelerate incomes and wealth creation by smallholder (women, men and youth) producers of food commodities.

The mandate of REACTS is to enable agricultural development projects in the EAC Region to align, build core skills, and work with relevant partners in enabling business enterprises of smallholder producers to respond effectively to regional markets for food products, in the East African Community (EAC) Common Market of nearly 160 million consumers.This study contributes to the output on increasing understanding of regional markets.

About this ReportThe report presents statistics and characteristics of maize markets in the East African region to inform beneficiaries of IFAD projects principally and other stakeholders generally to better take advantage of existing maize markets nationally and regionally.

AcknowledgementThe authors would like to thank all the organizations, private companies and individuals who provided data and information that went into developing this report. Kilimo Trust would also want to thank IFAD for funding this study.

DisclaimerThe views and conclusions contained in this report are entirely those of the authors and do not necessarily reflect the policy and views of Kilimo Trust or IFAD.

CitationKilimo Trust, 2017. Characteristics of Maize Markets in the EAC: Regional East African Community Trade in Staples (REACTS)

Executive Summary

Key Findings:

1. Demand and Supply of Maize in the EAC.Maize demand in the EAC stood at 12.6 million MT in 2015 and is expected to increase by 28% to 16 million by 2020.

Current maize consumption is mainly concentrated in Tanzania, Kenya and Uganda. As a region, in 2015 EAC had a maize deficit of 2.7 million MT driven largely by Kenya which accounted for 82% of the deficit, Rwanda and Burundi to a smaller extent. The current and project increase in maize demand is mainly driven by overall population increase in the region, coupled with changing dietary composition due to high in cost of other staple foods – a case of matooke in Uganda.

In 2015, EAC produced 9.89 MT of maize. Although collectively, the EAC is a maize surplus region, the deficit status is caused by inter alia export of maize to more lucrative markets outside EAC such as DRC and South Sudan for Uganda, high PHH losses (close to 30%) and increasing demand for maize in the animal feeds industry. In the period 2011-2015, Tanzania followed by Kenya were consistently the biggest producers of maize in the region with the former producing 6 million MT and the latter 2.85 million MT in 2015.

Amidst pockets of deficits, there is also a big opportunity for trading between countries because of differences in seasons/ agro-ecologies e.g Tanzania’s Harvest starts 2 months earlier than Kenya and Uganda and thus can take advantage of May and June window to fetch better prices limited competition in Kenyan market.

2. Maize Trade in the EACThe region collectively imported slightly over half a million MT of maize in the period 2009-2015. Consistent with her deficit status, Kenya took up more than 70% of the total imports followed at a distance second and third by Rwanda and Burundi respectively. Most of the maize imported is in form of grain at 89% as most of the commodity is used for food either as grain or flour.

South Africa, Malawi and Zambia are the biggest exporters of maize into the region majorly guided by different seasonal dynamics from those of EAC and the preference of Kenya to source maize from South Africa due to assured quality and quantities of maize.Within the region, Uganda is the biggest exporter of maize to her regional counterparts shipping ,73,347 MT in 2015 (representing 80% of total imports) while Tanzania accounted

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Executive Summary

for the rest. This is due to the fact that around 70% of maize produced in Uganda is marketed. However, although Kenya, the biggest market for maize in the EAC had a deficit of ~900,000 MT in the same year, only 26,744 MT came from Uganda exposing a dire situation of a missed market opportunity for this regional surplus country.

Low quality maize from Uganda and unreliability of maize supplies from Tanzania due to adhoc export bans are factors to blame for the low level of trade between the two countries and deficit markets in the region led by Kenya.

Most of the maize traded in the region is in form of grain. For Kenya, which provides the biggest market opportunity in the region, there is a very strong maize processing industry-in fact, just about 4 companies are responsible for supply of more than 80% of flour consumed in in the country thus operate oligopolistically. As such, the biggest market opportunity in the EAC is for maize grain.

There is significant informal maize trade across borders of EAC countries majorly guided by deficit periods and seasonality dynamics among countries. Prices of maize traded informally are also dictated by deficit status of a country at any one point as opposed to quality parameters.

3. Market segmentation and competitiveness Consistent with the finding that maize is a staple food in the EAC, consumed as grain or flour, the biggest buyers of maize products are individual consumers and to a small extent, institutions such as schools and hospitals. However, under the current productive capacity, there is a growing competition for maize from a burgeoning animal feeds industry in the region especially from the highly commercialized dairy industry in Kenya.

The most important consideration of consumers in the EAC when buying maize is affordability. However, increase in incomes and consumption of maize in Rwanda and Tanzania have a direct relationship while it is the opposite in Uganda and Kenya.

Despite existence of tens of varieties released in each EAC country of study, there are only a handful eg, five (5) out of 120 released in Kenya that are traded. However, customers do not consider varieties to inform their purchase decisions, a factor that facilitates maize trade across the region.

Un-competitiveness of maize produced in the EAC is exposed using Tanzania as a case study where despite more than double prices offered in some Southern African countries, maize exported there from Tanzania fetched between USD 27-USD 78/MT less in profits than in Dar-Es-Salaam. For Tanzania, high transport costs and ad hoc export bans are to blame for the limited competitiveness of maize traded while for Uganda, poor quality limits maize trade in the country.

Key Findings

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Executive SummaryKey Findings

4. Characteristics of Value Chain Actors

Processors:

Processing capacity of maize millers in the EAC is between 46% (in Rwanda) and 54% (in Kenya) . This is due to limited productive capacity (with over 70% of maize produced is retained for household consumption except in Uganda) and inefficiencies along the supply chain.

There is a dualistic system in the processing node of the maize value chain in the region with majority being small-medium scale but also large scale processors who have a controlling stake in the industry especially in Kenya and Rwanda.

On average, processors in the EAC utilize around 55% of their installed storage capacity. This relatively low utilization of storage capacity among processors in the region is due to low productive capacity (processors hardly have enough to mill much less to store).

Wholesalers:

Wholesalers serve as an important fulcrum in the maize supply chain. Mostly itinerant, they supply maize to retailers and processors. Due to their ability to move to areas of production and predict volumes demanded by their market, they get at least 70% of the stock they want to procure although limited supplies and working capital stand in the way of procuring desired volumes.

Retailers:

Retailers handle small volumes of maize to principally sell to individual consumers. In effect, they procure just enough to serve this market removing the need to necessarily investing in storage facilities. Lean periods when they cannot get desired volumes, just like for other traders is due to seasonal complementarities.

Grain Storage Facilities:

Although, there is considerable number of grain storage facilities in the EAC set up by governments in Kenya, Tanzania, Rwanda and Burundi and more by the private sector in Uganda, there is a near to invest in more storage facilities closer to production. Most of the storage facilities are in towns and along the main trade corridors. For instance, Tanzania which has the highest grain storage capacity, can store only 250,000MT against the current production of over 5.5 million MT.

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Privately owned storage facilities in the EAC generally meet mundane grain storage standards such as absence of physical contaminants. They operate between 47-88% of their installed capacity. However, they suffer from pest infestation and lack of proper

equipment, factors that contribute to high post-harvest grain losses ranging from 10-60 %.

5. SWOT Analysis for Maize Markets in the EAC

Strengths Opportunities1) Maize is one of the major crop produced in the

region

2) Maize is a staple crop across the EAC region

3) Strong governments’ support to the sub-sector

4) Existence of private sector led institutions for advocacy like Grain Council of Uganda, Tanzania Grain Millers Association e.t.c

5) Presence of farmer based organizations

6) Availability of proven post-harvest handling technologies e.g hermetic storage

1) Current and projected increase in deficit in maize supply in the region (over 1 million MT), DR-Congo and S. Sudan.

2) Underutilized milling and storage capacity in the region

3) Regional integration offering a large market for maize

4) Many small and medium maize agribusinesses that can be upgraded

5) Prospects for commercialization of maize production like in the around Rift Valley belt in Kenya

6) Difference in harvesting seasons across the region to facilitate trade between agro-ecologies

7) Several development partner interventions in maize sector that can be up-scaled or built upon especially in increase production and dealing with NTBs

Weaknesses Threats1) Low, unreliable and scattered production/supply that

increases the cost of aggregation and transport

2) Limited access to working capital by majority of VC players

3) High post-harvest losses and limited awareness about and capacity to meet standards

4) Lack of rewarding system for meeting standards

5) Limited access to storage facilities by farmers

6) Informality of most business, limiting structured trade

7) Weak regulation (implementation and enforcement) of policies and standards across the whole value chain e.g tampered weighing scales

8) Information asymmetry about market opportunities

9) Many NTBs along the supply chain

10) Inefficient milling technologies

11) Limited utilization of processing and storage capacity

1) Effects of climate change such as the 2017 army worm all over East Africa

2) High interest rates on financial products (at above 20%).

3) Unpredictable trade environment (eg adhoc export bans by Tanzania)

4) Limited investment in rural infrastructure especially feeder roads and storage

5) Increasing urbanization that is encroaching on agricultural land

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6. Challenges and Recommendations

Challenges Recommendations

High post-harvest losses and lack of adherence to maize standards

• Promote proven simple post-harvest technologies to evaluate product quality especially at farmers’ level e.g. aflatoxin kit (VICAM), Moisture meters, etc.

• Build capacity for proper post-harvest handling especially at farmer level and generally for actors along the supply chain to meet EAC standards

• Promote incentives or rewarding systems for adherence to standards

• Capacity building (human resource and infrastructure) of the institutions mandated to enforce standards

Low, unreliable and scattered production/supply that increases the cost of aggregation and transport

• Invest in farm productivity enhancement approaches especially access to farm inputs and mitigating effects of climate change

• Capacity building of farmer groups to run as business entities concentrating especially on collective bulking, business & management, governance and entrepreneurial skills

• Develop strong structured business linkages along the value chain

Limited access to working capital by majority of VC players

• Support financial institutions to develop tailored products that suit agricultural value chains

• Capacity building of value chain actors/institutions to tap into low cost financing like equity financing

Limited access to storage facilities by farmers

• Establishment of smaller storage facilities (<300MT) closer to farmers

• Capacity building on bulking and management of existing storage facilities

• Provide pathways for access to affordable storage facilities and technologies

Informality of most business, limiting structured trade

• Create awareness on what is already possible, requirements for trade and benefits for being formal.

Information asymmetry about market opportunities

• Invest in periodical market assessments beyond EAC region

• Support dissemination of timely and accurate market information

• Promote platforms for up to date information sharing e.g national and regional commodity exchanges

Weak regulation (implementation and enforcement) of policies especially standards and addressing NTBs

• Capacity building (human resource and infrastructure) of the institutions mandated to enforce policies especially standards

• Collaborative lobbying and more commitment from governments to mitigating NTBs

• Provide empirical evidence for adverse effects of adhoc negative trade policies

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Report Outline

Introduction ........................................................................................................................................1

Methodology and limitations of the study ...............................................................................2

Study areas .............................................................................................................................. 3

Key Findings .............................................................................................................................4

Maize Demand and Supply Dynamics ...................................................................... 5

Maize Trade in the EAC ................................................................................................ 11

Segmentation of maize consumers in the EAC ....................................................23

Characteristics of maize Processors in the EAC ...................................................35

Characteristics of maize Wholesalers in the EAC ...............................................39

Characteristics of maize Retailers in the EAC ...................................................... 43

Grain storage facilities in the EAC ........................................................................... 49

SWOT analysis and business environment in the maize sub-sector in the EAC 55

Prospects for regional maize trade and contract farming in the EAC ............59

Challenges, proposed interventions and implication for IFAD projects .......................63

References ......................................................................................................................................66

Appendices .....................................................................................................................................68

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Introduction

Historically, maize has been and continues to be an important constituent of the household food basket in the EAC. Collectively the EAC, produces enough maize to feed her consumption needs. However, the region has

chronically maize deficit pockets both in the domestic and regional perspective on one hand while on the other, smallholder farmers who produce the biggest bulk of maize complain of limited markets for their produce. Moreover, the region has a comparative advantage for maize production over other countries where maize is as important a staple food especially Southern African countries which experience sporadic deficits or are conduits to other deficit countries.

It would be expected that with the on-going implementation of the East African Community-Common Market Protocol and the EAC-COMESA and SADC Tripartite agreement that provide for free movement of goods and protection of some “special” commodities such as maize, the commodity will move unabatedly from surplus to deficit pockets across the region.

However, inter-regional maize trade is low and largely unstructured due limited access to information regarding market needs by value chain actors resulting to inefficient distribution of the commodities across the region and ultimately, negative welfare effects to consumers.

It is against this backdrop that IFAD under Regional East Africa Community Trade in Staples Project, commissioned Kilimo Trust to conduct a study to characterize maize markets in the EAC to guide interventions by maize value chain actors to increase production, competitiveness and trade in the region and beyond.

The study was conducted in four of the now six EAC Partner States among traders, processors and key informants in the maize sub-sector in the region.

1

Methodology and Study Limitations

Review of Secondary data and Literature

Primary Data Collection

Data Analysis Report writing and validation

A draft report on maize markets characteristics in East Africa was generated and gaps to be filled by primary data were identified

Data was collected from a sample of maize actors: Wholesalers, processors, retailers and key informants. Purposive sampling was done because the study was oriented towards unlocking cross-border trade

Both qualitative and quantitative analysis: Excel and SPSS techniques were used to analyze primary data collected.

The report was generated from supplementary secondary data, literature and results from analysis of primary data. The report was then validated by key industry players

Limitations:• Primary data was not collected in Burundi due to the political instability at the time

of the study.

• Information on volumes sold to different markets and costs incurred in maize trading was hard to come by as actors do not feel comfortable giving it out.

• There was limited budget to cover more maize markets in East Africa.

N.B: Selection of study areas was purposive, based on prior knowledge of maize trading and consumption corridors in the EAC

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Study Areas

COUNTRY VISITED DISTRICTS/MARKETS

UGANDABusia, Lira Market , Mbale central market, Kasese, Manafwa , Masindi, Iganga

TANZANIA Mbeya , Namfua Market-Singida, Manzese , Igunga ,Kibaigwa

RWANDANyabugogo, Gisenyi Market , Kayonza , Bugarama, Rwamagana Market , Rusumo

KENYAKaratina Market , Kitale , Kakamega county munispal hall , Nyamakima Market

Study areas we selected based on prior knowledge of maize trade corridors and consumption hubs in the EAC

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KeyFindings

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MAIZE DEMANDANDSUPPLY DYNAMICS

Demand in the EAC was

million MT against production of 9.89 MT in 2015

12.6

million MT

Maize deficit in 2015 was

2.7

5

Consumption as Indicator of Market Size/Demand

2,4

00

700

180

Tanzania Kenya Uganda Rwanda Burundi EAC Total

Maize consumption in EAC (‘000 MT) in 2015

3,75

0

5,55

0

12,5

80

EACTotal2015

Uganda Kenya Tanzania Rwanda Burundi EACTotal2020

12,58

0

700 1,2

50

950 524

78

16,08

2

1,2,3

28%

Maize consumption in EAC 2015-2020 ('000'MT)

Maize represents a larger share of household diet in Kenya than in the other East African countries. Per capita consumption currently stands at 103 kg/person/year, compared to 73 kg for Tanzania, 31 kg for Uganda 6 and 14.1kg for Rwanda 7.

In Kenya, maize accounts for 42 % of the dietary energy intake and 68 % of the daily per capita cereal consumption. However, the country struggles to produce enough maize to satisfy increasing consumption causing a perpetual deficit status.

Burgeoning feed milling industry in the region especially for poultry and cattle has also resulted to increased demand for maize . In 2011, maize allocated to feed was estimated at 1millionMT 2.

Therefore, a paradigm shift is critical in production of maize to satisfy competing needs for maize as food and as a raw material for feeds.

Maize consumption in the EAC has been on an upward trend driven by increasing consumption mainly in Tanzania, Kenya and Uganda. More so, it is estimated that demand will increase by 3,502,000MT in the next 5 year to 16,082,000MT.

It is projected that the increase in maize consumption for food will be more in Rwanda and Uganda. This is due to increasing cost of traditional staples like bananas in Uganda and in the Rwandan case, its due to governments systematic support in maize production a non-traditional food, as a means of enhancing food security 1.

Source: 3,4,5, 60

Source: 3,4,5, 60

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Major Maize markets visited, their GPS Locations, market size and Volumes handled in EAC

Country LocationLatitude

(Decimal)Longitude (Decimal)

Market size (number of traders)

Total volumes handled by the market (MT/WeeK)

Uganda

Busia 0.46988000 34.08182167 450 900

Lira Market 2.24315300 32.89748890 150 300

Mbale central market 1.07633800 34.17546400 500 5000

Kasese 0.17174167 30.08215667 82 400

Manafwa 0.78795500 34.25169900 50 50

Masindi 1.68649833 31.72198 100 200

Iganga 0.61306167 33.47674 500 1500

Tanzania

Mbeya -8.91209200 33.46328500 49 140

Namfua Market-Singida -4.82000000 34.74500000 10 70

Manzese -6.79500100 39.23686100 180 300

Igunga -4.29750000 33.87416700 100 180

Kibaigwa -6.08177200 36.64779700 122 300

Rwanda

Nyabugogo -1.94045600 30.04824600 300 200

Gisenyi Market -1.75074900 29.27759800 20 12

Kayonza -1.89915200 30.50245800 70 100

Rwamagana Market -1.94984700 30.43672100 50 100

Bugarama -2.70016300 28.97656000 60 50

Rusumo -2.38378700 30.78009200 10 25

Kenya

Karatina Market -0.483739 37.124616 575 126

Kitale 1.018972 35.000498 290 1000

Kakamega county munispal hall

0.28778700 34.25636300 265 200

Nyamakima Market -1.26806700 36.75442000 180 500

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Uganda Kenya Tanzania Rwanda Burundi

Maize Surplus/Deficit in EAC ('000'MT)

2010 2011 2012 2013 2014 2015 (1,000)

(500)

-

500

1,000

1,500

Defi

cit

Surp

lus

Source: 3,4,5,60,11 Surplus/deficit- domestic production less consumption

Collectively, EAC was a maize sufficient region between 2010-2014 because production outweighed consumption. However, in 2015, EAC had a deficit of 1,100,000 MT due to increased consumption.

With this deficit, there is a chance of exploiting the comparative advantage of Tanzania and Uganda to produce enough to supply their perpetually deficit counterparts e.g Uganda is already the second largest supplier of maize to WFP in Africa after South Africa thus has potential to relieve the deficit status in the region.

Production of surplus maize in Tanzania can be attributed to suitability of maize in nearly all agro-ecologies and the fact that the crop is grown throughout the year 10.

Seasonal shortages despite periods of favorable seasons shed light to the inability of the region to hold sufficient stocks. This is because of the unstructured nature of maize trade: low volumes, seasonality, that often distorts markets both in exporting and importing countries sometimes resulting to negative welfare impacts. For example, in 2014, flooding of maize from Tanzania and Uganda in the Kenyan maize basket, Rift valley caused a 40% drop in prices of the commodity 64.

Therefore, efforts should be made to structure maize trade in the region backed by increasing capacity to store strategic reserves by both the public and private actors as well as removal of impediments of movement of maize from surplus to deficit areas.

Un-Met Maize Demand in the EAC

8

Source: 3,4,5,60,11

The Region experience shortages despite high Production compared to consumption

In 2010, all countries with an exception of Kenya were almost self sufficient in maize production.

The highest growth rate was experienced in Uganda mainly due to increased acreage: from 1.03 million Ha in 2010 to 1.1 million ha in 2014 16. Also, the relatively unrestricted access to the Kenyan demand gravity has a “pull” effect on production. In addition, the maize market in Uganda is fairly liberalized providing a predictable environment for trade.

Although Tanzania is the biggest producer of maize in EAC, it has the lowest annual growth rate of 4%, the same with Kenyan. This trend is attributed to distortive policies such as export ban that only serve to limit trade ostensibly, for food security concerns. Consequently, thin domestic markets dampens prices and discourages farmers from investing in increased production.

On the other hand consumption is increasing too at the same rate, but absolute values are lower Rwanda recorded the double digits growth rate in maize consumption, the highest in the region. This can be traced to an increased appetite by the urban population at 17% and their rural counterparts at 3% 7.

So why the deficits?

Uganda supplies significant amounts of maize to DRC. Eg, 4,199MT 2013 11.

PHH losses (close to 30%) due to limited PHH handling facilities and unsustainable markets – most market windows are open in particular months during periods of no/low harvests (Dec-Feb & Apr-May).

Also, a lot of maize is channeled to the growing animal feed/ livestock sector in the region5.

Source: 3,4,5,60

Maize Production Vs Consumption in EAC

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10

MAIZE TRADEIN THE EAC

million MTAnnual imports from world markets

~0.6

of total imports taken by Kenya

More than

70%Uganda is lead exporter of maize shipping

73,347

MT in 2015 representing 80% of total imports

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Trade- Imports into EAC Countries

Grain - 89.3%Starch - 6.03% Flour - 3.07% Groats - 0.68% Bran - 0.47% Hulled - 0.37%

Data on maize imports for Kenya in 2012 unavailable

Source: 11

On average, the EAC countries in total imported 524,626 MT if maize grain from world markets.

A surge in 2009 was perhaps due to the civil unrest in December 2007 and subsequent drought related shortages in Kenya, the biggest deficit market & largest importer of maize in the region.

Most of the maize imported comes from SA, Malawi and Zambia mainly because of differences in seasons.

The biggest Maize market opportunity in EAC lies in maize grain.

Uganda, Tanzania and Burundi respectively constitute the smallest markets for maize imports.

Kenyan market presents better opportunities both for maize grain and starch in comparison with other EAC countries

Although the National Cereals and Produce Board (NCPB), the strategic grain reserve in Kenya tries to regulate the maize markets to incentivize production, while keeping prices low for consumers, that has not saved the country from the perpetual dependence on imports.

Uganda imports more of starch unlike other maize products.

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Intra region Trade in MT

Trade beyond EAC in MT

2015 data for Burundi, Tanzania, Uganda and South Sudan2014 data for Rwanda2013 data for Kenya Source: ITC 2016

Amidst High Maize Importation, Intra Regional Trade is still Limited – Formal Trade

Uganda was the lead exporter of Maize to her EAC counterparts shipping 73,347 MT in 2015,

followed by Tanzania.

For Uganda, more than 70% of maize produced is marketed

mostly in regional markets as the country’s food basket

is diversified . Tanzania exports approximately 20% of total maize production 12.

However, despite Kenya providing a “pull” for maize exports from Uganda (and Tanzania), Uganda

only exported 26,744 MT of maize compared to the same exported

to Rwanda at 32,338 MT.

Low quality maize from Uganda curtails increased sale of maize to the formal market in Kenya especially to millers. Yet costs of producing maize in Uganda is lower, compared to countries like Rwanda 33.

For this reason inter alia, Uganda misses out on an opportunity to exploit her full potential of exporting between 200,000 and 250,000 MT per year 8.

Demand for maize from regional suppliers is increasingly becoming subjected to demand from competing deficit markets such as Malawi for Tanzania and South Sudan for Uganda.

For example, since 2011, Uganda has shipped 60% of her maize surpluses to South Sudan where together with other markets outside the region offer better prices. Most recently, maize was wholesaling at USD 55/90kg bag in Lilongwe while the same was going for USD 23 in Nairobi.

Exploring ways of increasing maize production at cost efficient ways will result to competitiveness in both regional and intra-regional markets.

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INTRA REGIONAL TRADE – RECORDED INFORMAL TRADE ACROSS BORDERS IN EAC Vs Prices in MAJOR MARKETS Border post: Busia, Gatuna, Lwakhakha, Malaba and Mutukula

Informal cross border trade volumes and prices vary based on seasonalities in different countries and major markets.

Increase in volumes traded between August and September is due to early supply from Tanzania (Masika season) while the decrease between Oct-Dec is attributed to decreased demand from the Kenyan market as the country harvests during the same period.

Maize prices in Bujumbura remain slightly higher & stable than the rest of the markets throught the year due to a recurrent deficit & limited supply.

Maize prices in Kenya are on average 20% above local Tanzanian & Ugandan prices- potential export market. However, for Tanzania to participate favorably, the country must beat lower Ugandan production and transport costs.

Onset of harvesting in different parts of EAC leads to drop in maize prices in major markets (July – February). As such, how much maize is produced in a subsequent season is influence by prevailing prices in destination markets 8,9.

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Trade volumes correspond with seasonality of maize supply in EAC

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecKenyaUgandaTanzaniaRwandaBurundiSouth Africa

KEYTiming of harvest from the main rainy season (large quantities)Timing of harvest from the secondary (short) rainy season

Country Area Of Production

Destination Trade Flow Period

Lowest Price US$/Kg

Highest Price US$/Kg

Kenya

Migori Kisumu Jun-Sep 0.20 0.25

Busia Kisumu Apr-Sep 0.20 0.25

Eldoret Kisumu Oct-Mar 0.09 0.11

Rwanda

Gasabo Kigali Jan-Dec 0.32 0.45

Kigali Nyongenge Jan-Dec 0.76 1.53

Tanzania Kigali May-Nov 0.44 0.65

Tanzania

Morogoro Mungano Mar-Aug 0.16 0.21

Sumbawanga Kinondoni Mar-May 0.16 0.23

Songea Manzese Mar-Jul 0.28 0.30

Uganda

Masaka Busia Feb-Apr 0.18 0.26

Kamuli Busia Jul-Dec 0.15 0.21

Kiboga Kampala Oct-Feb 0.09 0.24

Harvest seasons in all countries affect supply/trade flows and prices of maize.

June-August is the major supply period in EAC.

Uganda has 3 significant harvest periods because of the different agro-ecologies that gives it the potential to supply the regional market and fetch better prices when others are not harvesting especially between Nov-Dec.

Tanzania’s harvest starts 2 months earlier than Kenya and Uganda and thus can take advantage of this window (May and June) to meet/contribute to Kenya’s annual deficit with limited competition and better prices.

Tanzanian and Ugandan maize surpluses can be exported in the Kenyan, Rwandan and Burundi markets between May and Aug and to December in Uganda, when the countries harvest maize and the latter three are in a “non-harvest” or deficit periods.

However, investment in PHH facilities especially better processing technologies is needed to optimally benefit from region’s deficit

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Implication Of Low Cross Border Trade - Maize Surplus-Deficit Areas In East Africa

There are pockets of maize surplus and deficit in the EAC countries with Tanzania having the most surplus areas. However, some of producing areas e.g. Mwanza become deficient soon after harvest as most of the maize is sold then at very low prices 8.

Southern Highlands of Tanzania and North Eastern parts of Rwanda, Western Kenya and Rift Valley as well as Eastern Uganda have a potential to supply deficit areas in EAC.

Incidences of glut and shortages within a country can be averted by investments in storage facilities and establishment of or better management of the role of a strategic grain reserve. This is important especially to shield producers and consumers from price fluctuation.

Data source: 63

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With the imbalance, the EAC region exports maize to neighbours

Starch

Grain

Bran

Flour

Groats and meal

42.68%

42.68%0.14%

0.07%

54%

EAC Maize exports to outside the region (MT) Proportion of exported maize products out of EAC in 2013

Outside East Africa, Tanzania, Uganda & Rwanda are surrounded by countries with either sporadic or chronic maize shortages.

Malawi for instance was in need of more than 1.2 million MT of maize earlier in 2016 out of which Tanzania could only supply 50,000MT. Moreover, Malawi has lifted an existing ban on maize flour which Tanzania could take advantage of but only grain was exported 14.

South Sudan which until early 2016 was not a EAC Member State, is currently the biggest export destination for maize from Uganda (especially maize flour), in addition to DRC (still maize flour).

However, this trade is constrained by numerous NTB such as complex clearance procedures at the border point with South Sudan and general insecurity in the country 15.

Accelerating efforts to remove barriers to trade among EAC Member States and other strategic deficit markets will be an important underpinning to prospects for increased trade in maize.

Even with the deficit Pockets, the EAC region exports maize to neighbours

Source: 11

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Taking advantage of Deficit markets: Assessing Readiness of Tanzania to take advantage of the current Maize deficit in Southern Africa

Malawi Scenario

1,072,461MT - Estimated maize deficit in 2015-2016 & 250,000 MT to re-stock the Strategic Grain Reserve.

250,000 MT needed to effectively stabilize maize prices in the 2016/2017 season.

Zambia Scenario production down by 21% in

2015

Traditional Export markets facing deficit: South Africa- 26%; Angola, 15%; Namibia 43%; Zimbabwe: 50%

Opportunities for Tanzania as Member of SADC and neighbouring country

Tanzania is a non-genetically modified organisms (GMO) maize producer, unlike South Africa, making it easier to comply with GMO restrictions in countries such as Zimbabwe and Malawi.

Zambia, a exporter of maize to some Southern African countries that are currently facing a deficit has a temporary suspension (ban) of exports meaning that these countries may have to seek maize imports from outside of the region.

15-40% increase in maize prices in Southern Africa e.g to a high of USD 611 per MT in April 2016

As a member of SADC, Tanzania can export to southern Africa countries duty free.

However, there exists vey limited trade between Tanzania and Southern African countries except for limited volumes to Zambia and Malawi from the Southern Highlands of the country 19.

Can Tanzania Take up the these Opportunities?

Tanzania produced 6,000,000 MT of maize in 2015/16 and the national demand amounts to 80% of total production (4,800,000MT) leaving 1, 200, 000 MT as surplus. However, harvests reduced during the January February season resulting to tightened supply for the country.

However, Tanzania exports much of her maize to regional structurally deficit countries like Kenya due to strong effective demand and higher prices. In 2015, Kenya maize production fell by 30% indicating an increased demand for the commodity in the country18.

Demand for Tanzanian maize in Kenya fell by an average of 55% in 2015 due to an increased by 17% harvest in the 2014-2015 season. This meant that Tanzania had to look for alternative market for her maize surplus17.

Tanzania imposed a ban on cereal exports earlier in 2016. Although the ban was lifted in September 2016, the government sought to reintroduce export permits and quotas on maize (and rice)14. In conclusion, Tanzania may not have fully capitalized on the acute deficit of Maize in Southern Africa owing to limited supplies and adhoc export ban earlier in 2016.

19

Case of marketing Cost for selling 1 MT of Maize from Mbeya to Dar Es Salaam, Lilongwe and Lusaka- July, 2016

Competitiveness of Maize Trade:

38 16

56

23

1 6

27

57

32 1 6

Estimated using Iringa Costs

Gross margin from selling maize in Dar=105US$/MT

Gross margin from selling maize in Lilongwe=27US$/MT

Gross margin (loss) from selling maize in Lusaka=-78US$/MT

233

354

459

233

319

346

233

329

251

105

78

Ceteris paribus, there was no price incentive in 2016 to ship maize from the Tanzania to either the capital of Zambia or Malawi even when maize prices collectively escalated by 61% in July 2016. Hypothetically, gross margins would be lower in Lilongwe and Lusaka by USD78/MT and USD27/MT respectively than in Dar-Es-Salaam 13.

Historically, Tanzania has exported maize to Malawi and Zambia through informal cross border . For example, in December 2005, Tanzania informally exported close to 19,200 MT of maize to Malawi and 18,300MT and to Zambia which we experiencing reduced national reserves, representing the highest volume of informal maize export by one country in a single month in any of the Southern African borders. Maize exports to Malawi and Zambia originates from Iringa and Mbeya 22.

Export marketing costs are high driven by transport and taxes as well as NTBs such as bribes.

Bribes at Tanzania borders with Southern African counterparts are rampant and contribute to increase costs of informal cross border trade and delays in delivery of cargo20. Poor transport infrastructure and distortive policy interventions are culprits of high cost of cross border maize trade between Tanzania and her Southern African neighbours. Also, cost of loading and offloading maize can contribute to 12% of total marketing cost due to small loads of maize at early stages of supply chains.23.

Source: 13, 20, 22, 23

20

Do Largely Surplus Countries in Southern Africa present a reliable market for Tanzanian Maize?

Currently, Tanzania could be the only source of white maize for SADC countries as South Africa which produces 40% of white maize consumed in SADC countries-are facing severe national shortages occasioned by drought 18.

Arguably, demand for Maize from Tanzania by structurally surplus Southern African countries is sporadic and pegged on incidences of weather vagaries and the potential of South Africa to supplied occasionally deficit pockets of the region. Besides, transport costs taxes and bribes at border points add to the burden of exporting food surpluses from majorly surplus Southern Highlands of Tanzania. Notably, inland transport costs are high-averaging up to 76% of total marketing costs, a factor that overrides the incentive to trade regionally even if export parity price is favourable 23. For example, per Kilometer vehicle operating cost for a two-axle trucks in Tanzania is 50.1 US cents, substantially higher than the operating costs in Pakistan (21 US cents) and Indonesia (19.7 US cents)24.

In addition, higher fuel, maintenance and tire costs as well as overheads eat more into profitability of cross border traders. Delays at border points can be as long as 17 days between Tanzania and Zambia. However, simplifying trade and customs regulations in Tanzania has resulted to an increase in exports as a share of production by approximately 4% for an average enterprise 24.

Granted, cross border trade-formal or otherwise-between Tanzania and traditional importers such as Malawi and Zambia will continue to happen driven by demand-supply dynamics (regional or national) and political climate of the trading countries19, 21 . However, to expand and structure it to make it more profitable for economic actors, it will be pertinent to improve trade infrastructure: transport and aggregation centers in production areas and improve efficiency of border clearance procedures. To the latter end, establishment of One Stop Border Post (OSBP) or Joint Border Post (JBP) systems will not only increase the flow of goods, it will also significantly improve productivity and competitiveness of enterprises.

21

22

SEGMENTATIONOF MAIZE CONSUMERSIN THE EAC

of all maize buyers are individual consumers

Demand for maize from animal feeds industry is rapidly increasing

Over

85%

23

Market segmentation: Who and where is Maize Consumed?

KENYA

TANZANIA

RWANDA

UGANDA

Maize is the main staple food in Kenya, accounting for 65% of total staple food caloric intake and 36% of total food caloric intake 36. Nairobi, Mombasa and their environs are the biggest maize market 23.

It is estimated that close to 25-30% of the maize produced is bought by National Cereals and Produce Board (NCPB). This is later sold to individual consumers, schools, prison and other institutions during periods of deficit in the country.

Smallholder farmers who produce 70% of the maize in Kenya retain 58% of their harvest for home consumption 28.

Maize accounts for nearly 20% of total food expenditures among the poorest, 20% of urban households, declining to 1% of total food expenditures among the top wealthiest 20% 36. However, in the urban areas, maize is an inferior good whose consumption drops with increase in incomes. Generally, the role of maize in the diets of urban and rural consumers is diminishing due to access to other staple alternatives, health awareness especially among urban consumers and price fluctuations of the commodity 26. Only about 3% of the white maize consumed is directed to animal feed 8.

Maize is a staple to about 40 million people’, between 85-90% of Tanzania’s population16. The crop provides 60% of dietary calories and more than 35 % of utilizable protein 6.

Around 60- 85% of the maize produced is consumed at the household level. Surpluses are bought by other farmers, by urban dwellers and by maize-deficient regions: Dar-Er-Salaam, Singida, Lindi, Coast and Kigoma 8, 36. Other markets for maize include institutions like schools, hospitals, prisons.

20% of the maize consumed is utilized by the animal feed industry 8.

Between 50-52% of maize produced in Rwanda is consumed by producers 9, 34.

Most of the maize products are mostly consumed in urban centers like Nyabugogo, Kigali, and Rubavu 31. For instance, maize flour is sold to independent traders, supermarkets, restaurants and independent retailers who in turn re-sell to prisons, secondary schools and NGOs (e.g. WFP and CRS) 34.

Maize flour produced in rural mills is mostly sold to local consumers due to its poor quality. Locally produced maize is consumed in areas of production more than in urban centers 31 an observation that was made during this study.

Maize in Uganda unlike her EAC counterparts does not form a significant part of populations diet. Only around 20% of maize produced is retained for consumption. However, due to the ever increasing cost of other traditional staples such as cooking bananas (matooke) , maize is gaining popularity especially among urban consumers. For example, consumers in Kampala alone account for 50% of maize traded formally 27.

About 10-12 % is used as animal feeds (maize bran). Value added maize products are also gaining traction in the urban areas of Uganda 27, 8. Maize as flour is also consumed within institutions (schools, prisons, hospitals, etc) and purchased as grain by World Food Programme (WFP) for distribution in distress areas within and outside Uganda 30.

24

Major Categories of maize buyers

Tanzania

80 90 100

Kenya

Rwanda and Uganda

Individual consumers Food vendors

MAJOR CUSTOMERS FOR RETAILERS(MAIZE FLOUR)

0 20 40 60 80 100

Kenya

Rwanda

Tanzania

Uganda

Retailers Individual consumers Institutions

MAJOR CUSTOMERS FOR PROCESSORS (MAIZE FLOUR)

In all the EAC countries majority of the retailers sell their maize products to individuals consumers. They handle small volumes of maize as demanded by individual consumers.

However, wholesalers trade among each other and/or with retailers and institutions, an indication of level of inefficiency in the value chain.

Institutional buyers constitute a significant market for processors in Kenya. This is not surprising as institutions such as prisons, the armed forces, hospitals and schools consume maize flour 12.

In Tanzania, 80% of maize is traded locally 12 as exporting is curtailed by high transport and administrative costs at border points that disincentivizes traders from participating in cross border trade 35. In Kenya wholesalers role is mostly limited to buying maize from surplus areas and selling to retailers and millers in deficit areas within the country 36.

Maize currently produced is only enough for use as food and rarely for other uses such as animal feeds production. There is also no product differentiation largely limited to grain and flour.

As such, expanding production capacity of the region together with increasing the range of maize products would allow players to access more markets for value added maize products.

Source: Own study 2016

0 50 100

Kenya

Rwanda

Tanzania

Uganda Retailers Fellow Wholesalers Institutions Supermarkets Individual consumers

MAJOR CUSTOMERS FOR WHOLESALERS


25

Forms and Categories of Suppliers of Maize Sold in the EAC

Reta

ilers

Kenya Rwanda Tanzania UgandaPerc

enta

ges

of re

spon

dent

s

Who

lesa

lers

Reta

ilers

Who

lesa

lers

Reta

ilers

Who

lesa

lers

Reta

ilers

Who

lesa

lers

100

0

Green Maize in cobs Dry Maize Grain Flour (fine) Flour (coarse)

Reta

ilers

Proc

esso

rs

Who

lesa

lers

Reta

ilers

Proc

esso

rs

Who

lesa

lers

Reta

ilers

Proc

esso

rs

Who

lesa

lers

Reta

ilers

Proc

esso

rs

Who

lesa

lers

Kenya

Individual small holder farmersLarge scale farmersTraders

Rwanda Tanzania Uganda

Small holders farmer groupMiddlemen/purchasing agentsOpen markets

100

0

Forms of maize procured by Traders Major suppliers to the maize value chain actors (%)

Despite other parts of the maize plant having an economic value: leaves, stalk, tassel, and cob to produce a large variety of food and non-food products, their uses are seldom explored in the EAC.

As revealed in Kenya, under-developed last mile infrustracture such as storage facilities, limited financing options and access to technologies limits value addition of maize37.

It is thus the onus of both public and private sector to facilitate access to these critical services to realize full benefits of the maize value chain.

Traders (wholesalers) and individual farmers dominate supply of maize to other value chain actors.

In Kenya, the maize value chain is unorganized consisting of many small assemblers, brokers, medium and large-scale wholesalers and retailers. Wholesalers buy maize from assemblers and also directly from farmers, usually those in surplus areas for resale in deficit areas, and to millers 26.

Traders in the EAC majorly procure dry maize grains and flour which are also the forms in which maize is also consumed. In Kenya, maize flour is used to prepare corn cake (ugali) while grain is used for githeri (a mixture of maize and beans), mukimo (a mixture of maize, mashed potatoes and vegetables) and as steamed/roasted green maize 32. Also, maize is consumed as whole, or as flour to make corn cake [Posho, or Ugali], or as porridge – especially in urban centers of Uganda 27.


26

In Tanzania, farmers take a part of their surplus to local millers while downstream the chain, maize passes through traders to millers in urban centres and some by an agent who take it to aggregation point or to large-scale millers 12.

Individual farmers supply maize to processors in Kenya and Uganda a factor that could point of the small nature of processers in these two countries. 30 Additionally in Kenya, processors link with farmers through adhoc arrangements whereby they provide inputs on credit in return for uptake of crop after harvest at pre-agreed prices.

This calls for promotion of collective marketing through creating pathways to access market information, contract arrangements and better storage facilities at farm level

27

Major Varieties of maize sold in EAC

CountryYear of variety release

Number of varieties released

Examples of Varieties grown

Varieties procured by traders

Kenya

1964-1999 25Shipindi, H622, Nyamula, Sam aria, H511, PIONNER 3253, Ke-Bugan-da,H614,Pwani (PH1). H513

Big size, Kenya Seed, 614, DH02,

2000-2009 120

Tanzania

Late 1950s- 1999 27Staha,Kito,T-MV1,TAN250, Katumani

Kahama, Kalamata, Kibaigwa, Mbeya, Seedco, Staha, Umoja, WH, Katu-mani, TMV, PAN

2002- 2010 49

Uganda

1960-1999 6 Longe 4, longe 2H, Longe6H, Longe 5 (Nalongo and Salongo)

Brown, Longe 5, UH50503, WE2106 White2000 - 2003 13

Rwanda

M081, RHM102, M104, M102, Z607, KH500-46A, KH500-31A, RHM103

White, Mugamba, Isega, Uganda seed and Kenya seed

Source: Own study 2016 and 39,25,40,41,42

Despite existence of many varieties released in a country, there are only a few that are grown and traded. White as opposed to yellow maize is majorly consumed in Eastern (and Southern) Africa 38. As such economic agents such as traders look out for the same when procuring maize and don’t care much about varieties.

In deed, this study revealed that maize traders mainly look out for “foreign matter content” and colour (white) of maize that they procure, implicit of limited quality insensitivity of consumers.

Although varieties of maize grown in individual countries of the EAC are different, the fact that traders are not specific on the varieties they procure presents a good opportunity for intra-regional trade.

28

Market segmentation: Packaging of Maize in EAC

16

43

33

20

Kenya Rwanda Tanzania Uganda

Percentage of Retailers selling already packaged maize products (%)

More than half of retailers in all EAC countries do not package maize when selling implying that consumers do not consider packaging as important.

Expensive

Material not available

Consumers do not requirepackaging materials

Reasons for not packaging according to retailers

Maize is packaged mostly in 1-2kg bags in all countries except Uganda where 25kg and 50kg bags are prominent. This could be explained by the fact that some urban trader sell their maize to processors and institutions who procure in bulk 27. In Kenya, retailers mostly sell to individual consumers who buy maize on demand in 1-2kgs mostly measured in tins 26.

Even then, traders are constrained with expensive packaging material which is at times not available.

Packaging is not an important consideration in maize retailing in the EAC a pointer to small and informal nature of this mode of the value chain. However, it could mean that traders are missing out on more sophisticated but niche markets.

0 20 40 60 80 100

Kenya

Rwanda

Tanzania

Uganda

Percentage of Retailers

1kg 2kg5kg 10kgs25kgs50kgs_pl

Size of packaging of maize sold by retailers in EAC


29

0 25 50 75

100

Reta

iler

Who

lers

aler

Proc

esso

r

Reta

iler

Who

lers

aler

Proc

esso

r

Reta

iler

Who

lers

aler

Proc

esso

r

Reta

iler

Who

lers

aler

Proc

esso

r


Perc

enta

ge o

f res

pond

ents

Grade 1 Grade 2 Grade 3 Level of satisfaction

Grades of maize demanded and level of satisfaction by actors in the value chain


Traders and processors in the EAC mostly procure grade 1 and 2 of maize in varying extents as obviously informed by what is demanded by consumers. However, the parameter used to determine grades is not necessarily neither consistent nor accurate with the EAC standards. Processors in Rwanda were indifferent about grades although they reported content with what they find in the market.

According to the East African Grain Council (EAGC) there are three types of maize grades: 1, 2 and 3, differentiated by their level of breakage, moisture content and foreign matter content among other parameters.

With the few actors who reported some dissatisfaction with the grades that they procured, they blamed it on poor post-harvest handling along the value chain as well as limited information that suppliers have on market standards.

While this may be so in domestic markets, it is a different case when it comes to cross border trade especially for Uganda where maize produced is sold to deficit countries in the region. The country lacks national grains standards meaning that quality remains largely subjective and variable. This limits access of Ugandan maize exporters to the formal maize market in Kenya represented by large millers 27. In Tanzania, domestic maize markets have little or no indication of standards and even across the whole value chain, there are few quality checks 12.


30

While this study did not concentrate on the green maize value, it is important to note that the commodity is considered a delicacy in nearly the whole of Kenya mostly substituted for dry maize to make “githeri” ( a mixture of maize and beans). Boiled or roasted green maize is also popular among the Kenyan populace especially in residential suburbs. This has led to an upsurge of people selling the delicacy putting an upward pressure on the prices of the commodity which is not available all year round. For example, in 2013, a 115Kg bag of green maize was retailing at between KES, 2,020 and KES 5,070 while the price of a 90Kg bag od dry maize was stable at KES 2,856 43. This presents a opportunity for would be suppliers of green maize in Kenya from other EAC countries.


31

Market segmentation: Maize Grades in the eyes of traders in the EAC

Understanding of Maize Grades by Traders in the EAC

Country

Quality Parameter

No foreign matter

White in colour Brown in

colour

Very fine

Coarse Whole grain

Disease Free

Well Dried

Flour Grain Flour Grain Flour Flour Flour Grain Grain Grain

KenyaGrade 1

Grade 2

RwandaGrade 1 A bit

broken

Grade 2

Tanzania

Grade 1

Grade 2 little A bit broken

Uganda

Grade 1

Grade 2 Not clean

“ Broken

There is no coherence of parameters and extent of maize and maize flour standards among traders in individual Partner States of the EAC

Also, traders categorize all the maize they deal in as Grade 1 and 2 although Grade 3 is also sold in some markets.

Maize markets in the region are not guided by the EAC standards as should be. In addition national standards are not completely consistent with the regional ones. This is despite initial efforts to harmonize maize standards among the EAC countries in 2013 44 and initiatives in 2016 to finalize that process 45.

In addition, there is little understanding of and even less adherence to these standards by traders in the region. This is because maize is largely traded informally with limited if any quality control systems along the value chain.

Also, good quality maize does not necessarily reward traders thus there is no incentive for adoption of the EAC standards.


32

As such, it is important to build capacity of maize actors in EAC harmonized standards of maize as well as provide incentives such as diversified markets for their adherence. Also, there is a need to fast-track interpretation and translation of harmonized standards into local languages and putting in place an enforcement framework.

EAC Maize Standard requirements

CharacteristicsMaximum limits

Test methodGrade 1 Grade 2 Grade 3

Foreign matter, % m/m 0.5 1 1.5

ISO 605

Inorganic matter, % m/m 0.25 0.5 0.75

Broken kernels, % m/m 2 4 6

Pest damaged grains, % m/m 1 3 5

Rotten & Diseased grains, % m/m 2 4 5

Discolored grains, % m/m 0.5 1 1.5

Moisture, % m/m 13 13 13 EAS 285/ISO

Immature/Shriveled grains, % m/m 1 2 3ISO 605

Filth, % m/m 0.1 0.1 0.1

Total Aflatoxins, ppb 10

ISO 16050Aflatoxin B1, ppb 5

Fumonisin, ppm 2

Total Defectives Grains, % m/m 4 5 7 ISO 605

Source: 46

33

Market segmentation: Maize Grades in the eyes of traders in the EAC

A considerable percentage of household budget on food in the EAC is spent on maize. For that reason, it is understandable that consumers want affordable maize which is also white in colour .

For the same reason, demand for maize in the region will be driven my population increase and changes in income. For example, in Tanzania, , about 40 million people, 85-90% of the country’s population, consume maize 12. With the current growth rate of 2.7%, as at 2012 census 66, consumption will increase by the same rate ceteris paribus. This will put pressure on the already stretched production capacity against a backdrop of increasing demand for maize from neighboring countries.

Notably, changes in incomes have an inverse relationship with maize consumption in Kenya: incomes and urbanization was expected to reduce per capital consumption of maize from 67.5Kg in 2012 to 56.3kg in 2022, as consumers increasingly substitute maize with cooking bananas, Irish potato and sweet potato 26. The opposite is true for Uganda where due to growing cost of otherwise staple foods such a s cooking bananas, consumers are resulting to maize especially in the urban centers 27.

Therefore, any intervention towards developing the maize Value chain in the EAC has to be geared towards increasing availability of the commodity in the most cost effective ways possible. These interventions may include efficient ways of improving maize yields as well as reducing post-harvest losses along the value chain. Value addition especially for maize targeted to urban areas will also be an area worth exploring.

Quality aspects that influence maize consumers purchase decisions Demand Drivers


34

35

36

CHARACTERISTICSOF MAIZEPROCESSORS IN THE EAC

processing capacity at best

Operate at

54%

37

Profile of Maize Processors in the EAC

0 20 40 60 80

100 Kenya

Rwanda

Tanzania

Uganda

Nearly all maize processors operate with a licence issued by mandated local or national authorities. In Uganda millers operate on small scale scattered around districts with medium scale processors located in major town centers offering contract based as well as toll milling services to urban traders 9.

In Tanzania, over 90% of maize millers are of small-scale nature most of whom are not registered. This is because they handle small volumes of maize making small margins which cannot allow them to enter the formal industry. Large processors such as Mohammed Enterprises Tanzania Ltd (MEL) are well organized and have the capacity to take risks and can potentially structure the maize industry in the country 57.

Most processors in the EAC operate as sole proprietors indicative of their small nature with an exception of Rwanda where largely, the maize market is controlled by a few large millers e.g. MINIMEX, with a financial muscle to import maize from Uganda and Tanzania during lean periods 31. The uniqueness of Rwanda is also the existence of farmer cooperatives that are integrated into processing of maize. This indicates a more organized processing node of the maize value chain in Rwanda compare to other countries in the region.

Largely small nature of the maize processing industry in the EAC explains where conversely, processors are unable to significantly supply the formal market.

Percentage of Processors per countryoperating with a License (Registration)

Types of registration of Maize Processor (Operating with license)


38

Processing Capacity Storage Capacity


While it should be noted that this study concentrated on small to medium maize processors, it was revealed that Ugandan and Kenyan processors utilize their storage capacities more efficiently than their counterparts. However, while big processors in Rwanda have invested in warehouses, their storage and processing capacities are low due to low production capacity in the country 31.

In Kenya, four major milling companies located strategically in major consumption hubs of Nairobi, Mombasa, Thika and Kisumu and their associates account for 80-85% of the total flour production implicit of the oligopolistic nature of maize milling in the country 36.

Utilized milling capacity is dictated by seasonality of maize harvesting especially for Uganda, and Rwanda that do not have national strategic reserves.

Due to the importance of maize and maize flour to the national food basket of EAC countries albeit in varying degrees, the slightest change in national availability of maize usually upsets the output of millers creating a speculative environment whose effects are passed on to consumers through price hikes. For example, between May and July 2016, Kenyan maize millers engaged in speculative behavior that resulted in price hikes of maize flour of between 8-15% 47.

Storage capacity of processors is also low due to limited productive capacity in the East African countries. Often, the processors just do not have enough maize to process much less to store. For example, in June 2016, there was reduced supply of maize from Tanzania to processors in Kenya which caused an acute shortage of maize for processing causing a 25% increase in maize prices 48.

Beside increasing maize production, facilitating borderless movement of maize from surplus to deficit areas across the EAC region will reduce fluctuations of maize availability and drastic increase in prices that hurt consumers.

Storage and Processing capacity of Processors in the EAC

39

Seasonal dynamics in Maize Supply toProcessors

Maize volumes desired by Processors vs actual volumes procured

Processors in Kenya and Uganda have the highest level of maize sufficiency that they require with their Rwandan counterparts experiencing the lowest. While the case in Uganda could be explained by the relatively high level of production of maize and marketed percentages, the scenario in Kenya could be attributed to the role of NCPB in stocking strategic reserves to smoothen supply curves especially during none harvest periods. On the other hand, processors in Rwanda experience maize shortages due to the low production capacity in the country and the inability of farmers to store maize during harvest seasons leading to high seasonality of maize supply to processors 14.

East African countries are known to suffer from periods of maize shortages and gluts. For example a recent shortage of maize in Kenya caused a 40% reduction in flour output by millers. This was caused by low domestic supplies and high levels of aflatoxins in the maize supplied both domestically and from Uganda and Tanzania due to poor storage along the maize value chain 49.

Therefore, investment in increased production, proper post-harvest handling, storage and efficient transport of maize from major production to consumption areas is paramount.


40

41

42

CHARACTERISTICSOF MAIZEWHOLESALERS IN THE EAC

are many, itinerant and are a link between farmers and markets

43

Formality of Maize Wholesaling in the EAC

However, maize in Tanzania passed through largely informal, unregistered and unregulated channels 12. Conversely, maize wholesalers in Uganda are mainly found in wholesale markets and larger urban areas like Kampala and Busia, otherwise maize moves from production areas to wholesalers through travelling traders 23.

The role of maize wholesalers in bridging the gap between surplus areas and deficit areas within a country cannot be underestimated. Formalizing their businesses would help them attract investment, especially in enabling them to buy and store maize during harvest periods and supplying the same during leaner periods without much of price distortions. Maize availability throughout a year would also ensure that they are in business for longer periods and would smoothen “supply troughs” along the value chain thereby reducing price fluctuations.

Maize wholesaling in Kenya and Rwanda exhibits relatively high level of formality as opposed to the same in Uganda and Tanzania.

In Kenya, wholesalers are registered and mainly buy maize from surplus areas and transport it to deficit areas where it is sold to retailers. During harvest time, they sell mainly to millers. Wholesalers especially located in surplus areas of Uasin Gishu have been in business for a period spanning from 10-20 years. Due their transitory nature, they operate as sole-proprietors 36 as is the case with their counterparts in other EAC countries.

0 20 40 60 80

100 Kenya

Rwanda

Tanzania

Uganda

0 20 40 60 80

100 Kenya

Rwanda

Tanzania

Uganda

Limited company Partnership Sole proprietorship

Proportion of maize wholesalers operating with Licenses (Registration) in

the EACType of business


44

Seasonal dynamics in Actual Vs Desired volumes of Maize procured by wholesalers

There is little discrepancy between the volumes of maize that wholesalers want to procure and what they actual get in the market. This could be explained by the fact that wholesalers are mobile and have established backward linkages that allows them to source for maize from far and wide. In Uganda, agents buy maize from farmers all over the country on behalf of wholesalers who in turn stock and transport it to the main markets in Kampala for and/or Busia for export 9. Rwandan traders are the same: they are dynamic, traversing the country and others within the region in search of maize 31.


45

Seasonal dynamics in Actual VsDesired volumes of Maize procured bywholesalers

0

20

40

60

80 Limited working capital

Supplier(s) dishonored the buying/supply contract

Low/limited supply

High price Poor quality produce

Limited market

High selling competition

Kenya

Rwanda

Tanzania

Uganda

Reasons for differential between desired Vs Actual volumes of maizeproduced by wholesalers

Seasonality and limited working capital dictate availability of maize to wholesalers. In fact, wholesalers do not buy maize to store awaiting to sell, rather, they just procure the volumes they predict the market wants or volumes ordered by their onward markets. Wholesalers in Kenya are however an exception: they have high working capital and have the ability to buy more grain from local traders, bulk it at the district level before transferring it to other markets 36.

The itinerant nature of maize wholesalers in the region can serve as a pathway to improve availability of maize to downstream actors as well as improve liquidity to upstream actors. However, for this to happen, there is need to improve or invest in more cleaning/storage/bulking facilities along the value chain where wholesalers can store maize. Also, providing affordable financing options for wholesalers would also enable them to procure as much maize as possible providing market for farmers during harvest seasons. Value chain financing through win-win partnerships would be a good option.


46

47

48

CHARACTERISTICSOF MAIZERETAILERS IN THE EAC

Operate at very small scale selling maize and maize products to individual consumers

49

Nature of Maize retailing in the EAC

0 20 40 60 80 100

Uganda

Tanzania

Rwanda

KenyaKenya Rwanda Tanzania Uganda

Sole proprietor Partnerships Limited Liability Company

Perc

enta

ge o

f res

pond

ents

100

80

60

40

20

0

Proportion of retailers operating with a license (Registration) in the EAC

Form of Registration

With an exception of Uganda, maize retailers in the region operate with some form of licenses. In Kenya, retailers operate in a decentralized system and are categorized as street kiosks, ‘dukas’, multipurpose retail shops, and retail markets 36. The latter group are based in urban centers where due to close monitoring by authorities, they have to be registered. This could explain the high level of retailers in Kenya who are registered as those were also the ones majorly interviewed. Maize retailing in Rwanda is relatively formal a factor that is consistent with the fact that Rwanda is a global trend setter in simplifying procedures for registering and starting a business 50.

One of the deterrents of registration of businesses is the high monetary and nonmonetary costs . For example, wholesalers pay between US$67.5 and US$ 142.5 for a single business license in Uganda while in Kenya, the same is about US$150-US$300 per year 50. Bureaucracy is also a culprit to formalization of businesses majorly owing to a decentralized registration procedure. For example, in Tanzania and Uganda new businesses are also subject to several pre-registration inspections 51.

But, why is business registration important at any level of a value chain? It boosts competitiveness, attract investment and increases trade. Therefore, it is paramount to simplify procedures for business registration and making it affordable, perhaps through available popular technologies like mobile phones.


50

Key findings per node: SeasonalDifferentials in ‘Actual’ and ‘Desired’Volumes of Maize Procured

Maize volumes actually sourced by retailers vs volumes desired

The magnitude and sufficiency of supply of maize products to retailers is driven by availability of the local market which in turn mainly dictated by seasonality of production. Retailers in Uganda and Kenya registered the highest levels of adequacy of maize and maize products, a factor that can be explained by the fact that most of them in Kenya are large and with resources to procure large volumes of maize while in Uganda, since maize is relatively cheaper than in the other markets thus ability to procure large volumes.

Kenya expriences the highest deficit and prices in December and January. However, this period also happens to be one in which retailers source the highest volumes of maize. This could be due to the fact that during that period, it is a harvest season in Northern Tanzania and parts of Uganda where Kenya traders source from at low prices. The selling prices may be the incentive for the retailers

Despite Tanzania being the largest maize producer in the region,

retailers in that country handle very small quantities .


51

Reasons for “High” and “Low” stockingby retailers and their storage capacity

49 39

56

26

0

10

20

30

40

50

60

0 10 20 30 40 50 60 70


Perc

enta

ge o

f util

ize d

Volu

mes

in M

T

Utilized Capacity

Installed Capacity

Percentage of utilized capacity

Kenya Rwanda

High retail pricesAvailability of aggregated productsHarvest period

Tanzania Uganda Kenya Rwanda Tanzania Uganda

Unavailability of productsHigh competitionLow retail prices

Reasons for large stock procurement by retailers in the EAC

Installed Vs utilized storage capacity of retailers in the EAC

Reasons for low stock procurementby retailers in the EAC

Availability of sufficient locally produced maize for retailers just like for other upstream actors is dictated by seasonal complementarities.

Maize storage is not common among individual retailers in the EAC owing to the fact that they deal in small quantities. However, the Ugandan case is unique as retailers have access to storage facilities both publicly and privately owned. This could be explained by on one hand, the non-distortive policy in maize marketing and the strong influence WFP purchases -Uganda provides the second largest maize consignment in Africa for WFP after South Africa. This has served to incentivize investment in storage facilities in the country 23.


52

Reasons for “High” and “Low” stockingby retailers and their storage capacity

Generally most maize traders do not own their own storage facilities: For example in Kenya 71% of traders do not have their own storage facilities while 60% of them rent. The traders who rent storage facilities in Uganda are relatively more at 86% of the 57% who do not own them while the same for Tanzania is 36% of 79% respectively 25.

Access to reliable and affordable storage facilities is critical in stabilizing food prices along the value chain. This underpins the importance of governments in improving policy environment to incentivize expansion of private storage capacity and technologies through private-public partnerships.

53

54

GRAIN STORAGEFACILITIESIN THE EAC

Many are located far from production areas thus underutilized

55

Nature of Maize Grain Storage Facilities in the EAC

Establishment of grain storage facilities in the region has come of age. However, their optimal utilization and establishment of more along maize corridors is still a far cry due to inter alia underfunding of the institutions mandated with procuring maize and limited enabling environment to allow private sector investment.

Also, production constraints and government interference in grains sub-sector creates unpredictable environment that results to limited utilization of storage facilities. For this to change, production of maize needs to increase, adequate funding of strategic grain reserves as well creating an enabling environment for private sector investment needs to be in place.

Generally, there is heavy public investment in storage facilities especially in production areas in Kenya (Western region) and Tanzania where the government operate 30 storage facilities (in South ,Central, Eastern, Northern and Lake/Western region) with a capacity of 278,000 MT .

Source: 64

56

Nature of Maize Grain Storage Facilities in the EAC

In Kenya, the National Cereals and Produce Board (NCPB) has 110 Silos & depots countrywide with a capacity of 1.84 million MT.

However, only about 30% and 49% in Kenya and Tanzania respectively of the capacity is utilized 52, 53.

There is a proliferation of grains storage facilities in Uganda in total but more so those owned by private sector and NGO’s to a smaller extent. The uniqueness of Uganda can also be seen in the investment of farmer organizations in storage facilities implicit of their relatively high level of commercialization in maize marketing 23. This is because of a liberalized maize sub-sector and the export orientation of maize production in the country that has served to catalyze private sector investment in storage facilities.

Under the Government of Rwanda’s Post Harvest Handling and Storage Task Force project that kicked off in 2010 and slotted to end in 2016, 42 warehouses and 4 metallic silos were constructed across the country in 2013 with a total storage capacity of 134,110 MT, while leveraging 8 warehouses with a capacity of 65,400 MT by the private sector 54.

57

The states of Privately owned Maize Storage facilities in the EAC

Registration status of private storage facilities (% of respondents) in the EAC

Operator’s Opinions on Quality characteristics that their storage facilities meet

There are many storage facilities in the region whose utilized capacity is low 12, 36,

55. Even then, just about half of the privately owned ones are registered with an exception of Rwanda where there is fairly high government’s involvement in strategic agricultural value chains. Storage facilities visited recorded substantial compliance with conventional grain standards of storage facilities albeit not quantified. However, they suffer from pest infestation and are poorly equipped all of which factors contribute to high grain losses and disincentivies traders from storing grain. Indeed, pests cause 15-100 % and 10-60 % of the pre and post-harvest losses of grains in developing countries 10.

Underutilization of storage facilities is due to lack of scale along the value chain as well as liquidity issue among actors such as farmers and wholesalers. As such deepening markets for maize will “pull” the need for storage as well as liquidity needed to buy and store maize for longer.

Well functioning storage facilities play a critical role in reducing post harvest losses and stabilizing prices of grains especially maize whose availability is majorly dictated by seasonality. 23 Farmers: small, medium and large incur substantial losses of between 67% and 95% in Uganda, Kenya and Tanzania the ones in the former country experiencing the highest losses 23.


58

Characteristics of Private Storage facilities dealing in maize

Installed Vs Utilized storagePercentage of storage facilities

subject to prospective expansionReasons for expansion

Not only does Uganda have more storage facilities, but also they are being efficiently used relative to those in other East African countries. This could be perhaps due to the prevailing favourable policy environment and high commercial orientation of maize industry in the country. There is also a correlation between high level production and investment in storage facilities in Uganda and Tanzania. However, seasonality of maize all over the region results to inefficient use of storage capacity a factor that could also disincentivize further investment.

Also, storage facilities are not necessarily located in the rural areas where production happens thus, their farmers access to them is limited.

Despite this, there is optimism in the grain storage sub-sector as more than half of the storage facilities visited indicated their plans to expand their installed capacity citing prospects of increased trade and speculation that prices will improve in the future. Perhaps this could be due to increased demand for maize for consumption and industrial use that has continued to incentivize increased production albeit disproportionately. For example, in 2005 the biggest brewing company in Rwanda-Bralirwa- acquired a loan to the tune of USD 25 million from the International Finance Cooperation to promote local maize production among 5,000 smallholder meant to be used for brewing 56. In Kenya, in addition to increasing consumption of maize due to population increase, there is demand pressure from a burgeoning animal feeds industry 3.

It is thus the onus of interventions such as REACTS to offer the much needed boost to efforts of the private sector to establish and/or expand existing storage facilities especially along critical trade corridors by leveraging increased production and diversified markets for maize and maize products. Crop financing especially to farmers who have immediate cash needs would help towards this agenda.


59

60

SWOT ANALYSIS AND BUSINESSENVIRONMENT IN THE MAIZE SUB-SECTOR IN THE EAC

61

What Rules and Regulations do Maize Actors Operate in and what are the costs of Compliance?

R: RetailerW: WholesalerP: Processor


R W P R W P R W P R W P

Market fees (USD)/Month 2 2 4 14 12 2 2 3

Business license fees (USD)/Year 67 159 259 57 57 31 46 81 21 83 72

Effects of markets and business license on maize actors in the EAC

The Maize industry in the EAC has few formal regulations indicative of its high informal nature. Rwandan traders pay more as market fees than their counterparts in the EAC. The stark difference is however revealed in annual business license fees in Kenya for both traders and processors. Tanzania maize business still pay for licenses despite the country reportedly abolishing the license fee for SMEs and reducing the cost for companies with a turnover of less than Tshs 2,000,000 57. Other fees may include local taxes while for informal cross border trade, it may involve additionally clearing fees at the border points 9.

Traders , compared to processors consider the costs of compliance with business regulation too high perhaps because they are itinerant and have to pay for these costs at several stages while moving maize from one place to another.

It is noteworthy that there are many NTBs along maize supply chains in the EAC constituting additional cost to traders and could be more of a disincentive to trade than formal regulations. For example in Tanzania, NTBS: weighbridges, bribes, roadblocks account for an average of 28% of total transaction cost per MT of maize by traders 58. The situation is more dire in Kenya; road blocks as well as unclear and cumbersome documentation requirements can increase cost of maize marketing by 35% and 26% respectively 59.

In the long run maize will continue being an important component of the food basket of people in East Africa. As such, trade between surplus and deficit areas will certainly occur and it only goes that to facilitate this, removal of any impediments to trade becomes inevitable.

Source: Data from own study Source: Own study 2016

62

SWOT Analysis of Maize Markets in the EAC

1) Maize is one of the major crop produced in the region2) Maize is a staple crop across the EAC region3) Strong governments’ support to the sub-sector4) Existence of private sector led institutions for advocacy like Grain Council of Uganda,

Tanzania Grain Millers Association e.t.c5) Presence of farmer based organizations 6) Availability of proven post-harvest handling technologies e.g hermetic storage

1) Low, unreliable and scattered production/supply that increases the cost of aggregation and transport

2) Limited access to working capital by majority of VC players3) High post-harvest losses and limited awareness about and capacity to meet standards4) Lack of rewarding system for meeting standards5) Limited access to storage facilities by farmers6) Informality of most business, limiting structured trade7) Weak regulation (implementation and enforcement) of policies and standards across

the whole value chain e.g tampered weighing scales8) Information asymmetry about market opportunities9) Many NTBs along the supply chain10) Inefficient milling technologies 11) Limited utilization of processing and storage capacity

Strengths

Weaknesses

Threats

1) Current and projected increase in deficit in maize supply in the region (over 1 million MT), DR-Congo and S. Sudan.

2) Underutilized milling and storage capacity in the region3) Regional integration offering a large market for maize4) Many small and medium maize agribusinesses that can be upgraded5) Prospects for commercialization of maize production like in the around Rift Valley belt

in Kenya6) Difference in harvesting seasons across the region to facilitate trade between agro-

ecologies7) Several development partner interventions in maize sector that can be up-scaled or

built upon especially in increase production and dealing with NTBs

1) Effects of climate change such as the 2017 army worm all over East Africa2) High interest rates on financial products (at above 20%).3) Unpredictable trade environment (eg adhoc export bans by Tanzania)4) Limited investment in rural infrastructure especially feeder roads and storage5) Increasing urbanization that is encroaching on agricultural land

Opportunities

63

64

PROSPECTS FOR REGIONALMAIZE TRADE AND CONTRACT FARMING IN THE EAC

65

Prospects & Incentives for Maize Traders and Processors to Trade Regionally - Sourcing Across EAC

0

20

40

60

80

100


Perc

enta

ge o

f res

pond

ents

Wholesalers Processors

Plans by maize actors in Rwanda and Kenya to procure maize from regional markets is consistent with their deficit status. For example estimates in 2015 indicated that Kenya and Rwanda had a deficit amounting to 25% and 6% respectively compared to Tanzania’s and Uganda that had a surplus of up to 8% , and 14 % respectively60.

To accelerate regional trade in maize, buyers need to be assured of availability sufficient maize that is of good quality maize to make economic sense. This is against a backdrop of high seasonality of the crop coupled with high post-harvest losses along the maize value chain. Indeed, 30-40% of maize is lost at the household level in Uganda and Tanzania 10, 61.

Maize actors in Uganda are less interested in regional sourcing as the country is largely a maize-surplus one and also that the commodity is of less importance in the diets of households relative to other countries.

Therefore, increasing availability of good quality maize through investments in increased production and affordable post-harvest handling techniques especially at farm level will be important underpinnings to catalyze increased regional trade in maize.

Proportion of Actors interested in Regional sourcing of maize

Incentives for trading regionally


66

Prospects of contacting farmers by maize processors in EAC

Proportion of processors in the EAC interested in contacting farmers

In a bid to explore more ways of ensuring a steady flow of maize, processors in Rwanda and to a smaller extent Kenya would consider contract farming.

However, as with other value chains, contract farming has proven a strategy that leaves smallholder farmers worse off and largely benefit other value chain actors. Most of the problems that mar contract farming especially in staple food value chains are institutional, ranging from fragmentation of smallholder farmers, to sideselling, diversion of inputs and other resources meant to be used for the contract crop as well as failure of buyers to honour their end of the bargain.

Interventions such as REACTS can play a facilitating roles in actualizing maize contract farming by boosting collective ability of farmers so as to be more attractive to contract buyers, linking ‘ready’ farmer groups with off takers as well as lobby for acceleration of regional trade within the EAC Common Market framework.


67

68

CHALLENGES PROPOSED,INTERVENTIONS AND IMPLICATION FOR IFAD PROJECTS

69

Challenges and Recomendations

Challenges Recommendations

High post-harvest losses and lack of adherence to maize standards

• Promote proven simple post-harvest technologies to evaluate product quality especially at farmers’ level e.g. aflatoxin kit (VICAM), Moisture meters, etc.

• Build capacity for proper post-harvest handling especially at farmer level and generally for actors along the supply chain to meet EAC standards

• Promote incentives or rewarding systems for adherence to standards

• Capacity building (human resource and infrastructure) of the institutions mandated to enforce standards

Low, unreliable and scattered production/supply that increases the cost of aggregation and transport

• Invest in farm productivity enhancement approaches especially access to farm inputs and mitigating effects of climate change

• Capacity building of farmer groups to run as business entities concentrating especially on collective bulking, business & management, governance and entrepreneurial skills

• Develop strong structured business linkages along the value chain

Limited access to working capital by majority of VC players

• Support financial institutions to develop tailored products that suit agricultural value chains

• Capacity building of value chain actors/institutions to tap into low cost financing like equity financing

Limited access to storage facilities by farmers

• Establishment of smaller storage facilities (<300MT) closer to farmers

• Capacity building on bulking and management of existing storage facilities

• Provide pathways for access to affordable storage facilities and technologies

Informality of most business, limiting structured trade

• Create awareness on what is already possible, requirements for trade and benefits for being formal.

Information asymmetry about market opportunities

• Invest in periodical market assessments beyond EAC region

• Support dissemination of timely and accurate market information

• Promote platforms for up to date information sharing e.g national and regional commodity exchanges

Weak regulation (implementation and enforcement) of policies especially standards and addressing NTBs

• Capacity building (human resource and infrastructure) of the institutions mandated to enforce policies especially standards

• Collaborative lobbying and more commitment from governments to mitigating NTBs

• Provide empirical evidence for adverse effects of adhoc negative trade policies

70

In Conclusion,...

The maize markets in the EAC present interesting dynamics characterized by a mis-match between supply and demand needs in quantity and quality parameters. However, with the right support, especially in bridging the gap between demand and supply, the sub-sector can be profitable to all value chain actors but most importantly to the millions of smallholder farmers who derive their livelihood (food and income security) from the crop.

However, there is a need for a paradigm shift from treating maize as first, a food security crop at household level and only as a commercial crop when there are surpluses to orienting its value chain activities towards producing for the market. This can only happen under a mutual understanding and trust among producers and the market for maize which is only possible under an environment of structured trade.

Beyond the region, in markets such as DR-Congo and S. Sudan, maize is becoming an increasingly demanded commodity in the form of flour which is a breakaway from the maize grain that is traded regionally. The East African region as a block is endowed with a comparative advantage in production of maize that can be harnessed to take advantage of these emerging markets for value added products. However, just like for the regional markets, targeting these markets would call for understanding of their needs and orienting value chain processing in the most cost effective ways especially against a backdrop of other competing maize importers such as the Southern African countries.

71

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73

APPENDICES

Appendix 1 Inventory of interviewed maize wholesalers and their supply gap

KENYA

NAME OF THE BUSINESSAREA OF LOCATION

ACTUALQTY (MT) PER MONTH

DESIRED QTY (MT) PER MONTH

PRODUCT FORM

Ascar stores Kisumu 8,300 3600 Maize_grain

Anand Shop Wholesalers Kitale 103 100 dry maize

Juhudi cereals Kitale 94 126 dry maize

Afya Grain Store Karatina 90 188 dry maize

Joseph Cereals Kakamega 84 108 dry maize

Transnzoia wholesalers Kitale 78 117 dry maize

Smart Cereals Karatina 67 1,080 dry maize

Grain harvest stores Kitale 63 90 dry maize

Simo Cereals Kakamega 60 84 dry maize

Oasis stores Kitale 59 77 dry maize

Fanaka stores Kakamega 52 75 dry maize

Wicky cereals Kakamega 50 73 dry maize

Wakalawu General Merchants Machakos 50 29 dry maize

Biddi cereals Kitale 42 58 dry maize

Khaembas store Kakamega 37 81 dry maize

Karatina Open Air Market Karatina 37 81 dry maize

Wanga shop Kitale 30 40 dry maize

Calvo Enterprises Kakamega 30 39 dry maize

Karatini open air market Karatini 24 46 maize grain

Obwolo Maize Store Kisumu 20 54 maize grain

Wakulima Stores Machakos 18 28 green maize

Glory cereal centre Nakuru 14 14 dry maize

Joystar Cereals Commodities Nyamakima 14 14 dry maize

Delta cereal traders Nyamakima 13 13 dry maize

Davinjo enterprises Nairobi 13 13 dry maize

74

Inventory of interviewed maize wholesalers and their supply gap

RWANDA




PRODUCT FORM

Amani Company ltd Kigali 15 20 Flour

Buhoro Company Ltd Kigali 15 20 Flour

Bikari Shop Ltd Kigali 10 20 Flour

Masudi co ltd Kilaki 10 15 Flour

Kaje e ltd Rubavu 8 10 Flour

Better of today ltd Rusizi 6 10 Flour

Gloria Shop Nyarugenge 6 10 Flour

Magazin Nyongenge 5 10 Flour

Heritage ltd Kimunoniko 5 20 Flour

Mozebin kayitesi Nyagatare 5 15 Flour

R mugemono Rusizi 5 15 Flour

Murokore shop Nyarugenge 5 10 Flour

Habonabashaka. Ltd Kirehe 4 10 Flour

Aukoreneza Ltd Rusizi 4 10 Flour

Murenzi R. Ltd Kirehe 4 10 Flour

Mukandora Gasabo 3 5 Flour

Nyagatare Business Rwamagana 3 10 Flour

Rwakagaba j Bosco shop Rwangoma 3 10 Flour

Niyigoba Emmanuel Nyagatare 3 10 Flour

T nsangimama ltd Nyagatare 3 10 Flour

Rafiki limitedWestern Rusizi

3 10 Flour

Chez Dama Rubavu 3 10 Flour

Amahoro Shop Rwamagana 2 5 Flour

R mukanziza ltd Kinehe 2 5 Flour

Appendix 1

75

APPENDICES


TANZANIA




PRODUCT FORM

Kwachura Daressalam 1,100 1,000 dry maize

Suba stores Mungano 420 1,000

Newton maize supply Mbeya 50 70 dry maize

EPJ stores Kinondoni 70 43 dry maize

Kwa chura Manzese 30 60 dry maize

Mndewa Kibaigwa 20 20 dry maize

Kwa Ali Gumbo Kibaigwa 15 28 dry maize

Omart Kibaigwa 13 28 dry maize

Chilongola Kibaigwa 13 25 dry maize

Omart Kibaigwe 13 20 dry maize

Mwaitege Mbeya 11 15 dry maize

Pius Business Mwanza 10 35 dry maize

Fr store Namanga 10 30 dry maize

Kwa Ali Gumbo Kibaigwa 9 15 dry maize

Chilongola Kibaigwa 8 10 dry maize

Said makupu Mbeya 8 8 dry maize

Juma business Mwanza 7 20 dry maize

Mama tausi Kibaigwa 10 15 green maize

Appendix 1

76


APPENDICES

UGANDA


ACTUAL QTY (MT) PER MONTH


PRODUCT FORM

Hamza General Stores Busia 51,000 200,000 dry maize

Murefu Stores Manafwa 20,050 80,000 dry maize

Maliki and Sons Mbale 1,520 20,000 dry maize

Obanga Atwero Lira 1,500 4,000 dry maize

Agrovet farmers Masindi 1,170 1,500 dry maize

Masindi District farmers associa-tion (MADFA)

Masindi 960 3,000 dry maize

Waisswa and sons general stores Iganga 780 1,420 Fine maize flour

Kaggwa business store Iganga 610 1,500 Fine maize flour

Bunyoro pride general stores Masindi 528 960 Fine maize flour

Go go miller Kampala 500 2,500 dry maize

Wobusobozi stores Iganga 475 700 Fine maize flour

Kajuma Masindi 440 1,000 dry maize

Wyclif produce Masindi 420 800 dry maize

Tulikuno stores Iganga 220 550 Fine maize flour

Gagamale Kampala 220 300 dry maize

Kasawo maize processors Kampala 170 300 dry maize

Produce general stores Iganga 150 220 Fine maize flour

Kyahurwa industries limited Masindi 132 290 dry maize

Ayose Ssewa Lira 131 560 dry maize

Kasasira Kasese 130 200 dry maize

Rwenzori millers Kasese 126 160 dry maize

Magherita millers Kasese 102 145 dry maize

Mugulusi millers Kampala 100 140 dry maize

dry maize

Appendix 1

77

APPENDICES

Appendix 2 Inventory of interviewed maize processors and their supply gap

KENYANAME OF THE BUSINESS AREA OF LOCATION ACTUAL QTY (MT) PER MONTH DESIRED QTY (MT) PER MONTH

Nairobi flour mills ltd Nairobi 4,770 9,000Commercial grain stores Kitale 1,710 2,430Salama Millers Karatina 1,134 1,530Kitale industries Kitale 252 297Posho mill unga no1 Kakamega 26 32Rashisi posho mill Kakamega 25 33Crater Flour Mills Iganga 14 18Kingangi Posho Mill Nakuru West 11 11Sara millers Ltd Kisumu 10 20Elshedai poshomill Kisumu 6 12Mutitu Maize Millers Karatina 4 6

RWANDANAME OF THE BUSINESS AREA OF LOCATION ACTUAL QTY (MT) PER MONTH DESIRED QTY (MT) PER MONTH

Bugesera Agribusiness Company Bugesera 4,000 10,000Freedom gahunga Kirehe 70 400M Patricia Ltd Rubavu 60 60Golden trust Rubavu 20 20Minimex Kicukiro - -

TANZANIANAME OF THE BUSINESS AREA OF LOCATION ACTUAL QTY (MT) PER MONTH DESIRED QTY (MT) PER MONTH

Khebhandza marketing co ltd Mbeya 3,000 3,000Sembe asili Manzese 900 1,800Kimvuli grain mills Tandale 900 2,000Kalle fiid company ltd Tandale 360 720Paulo posho mills Mwanza 40 50Lowasa machine Namanga 30 50Kibaigwa no1 super semi Kibakwa 10 20Kwa Emma Business Mwanza 9 15Mapatano machine Namanga - -

UGANDANAME OF THE BUSINESS AREA OF LOCATION ACTUAL QTY (MT) PER MONTH DESIRED QTY (MT) PER MONTH

AJOBE TRADE LINKS Lira 27,698 50,000Kasaija and Sons Millers Busia Uganda

Busia 12,000 80,000

Agrovet millers Masindi 3,900 4,500Wako joseph stores Iganga 1,775 3,000William millers Kasese 1,200 2,000Jomarg Hossan grain millers Hoima 630 900Rwenzori miller’s Kasese 550 720Masindi seed company Masindi 500 800Go go millers Kampala 51 75Ebenezer maize millers Mbale - -Mese business solution Mbale - -

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COUNTRY OFFICESHeadquatersPlot 42, Prince Anne Drive, BugolobiP.O.Box 71782, Kampala - UgandaTel: +256 392 264 980/1Email: [email protected]: www.kilimotrust.org

Kilimo Trust TanzaniaPlot 455, Avocado Street, KaweP.O.BOX 106217Dar-es-Salaam, TanzaniaTel: +255 22 278 1299Email: [email protected]

Documents

CHARACTERISTICS OF MAIZE MARKETS IN EAST AFRICA · The project is working with the IFAD-supported agricultural development projects in the EAC region to accelerate incomes and wealth