ALTERNATIVE

Kenya seeks new wheat markets in India and Serbia

Kenya is staring at a looming wheat shortage and the price of bread could go up, says expert

In Summary

• Serbia Ambassador to Kenya said Serbia imposed a ban on exports when the Ukraine-Russia crisis started, but it has now been liberalized and they have allowed exportation of 150,000 metric tons.

• Indian wheat is getting into the market at a cheaper price of above 300 dollars a ton compared to the rest of the wheat in Argentina, China and the US which is now quoted as over 500 dollars a ton.

Packets of wheat flour in a supermarket.
SHORTAGE: Packets of wheat flour in a supermarket.
Image: FILE
Farmers in one of the wheat farms in Olkurto area of Narok county.
HIGH CONSUMER PRICES: Farmers in one of the wheat farms in Olkurto area of Narok county.
Image: KIPLANG'AT KIRUI

Kenya is seeking to import wheat from India and Serbia to cushion consumers against the high cost of wheat flour and to avert the looming shortage.

Gerald Masila executive director, of Eastern Africa Grain Council (EAGC), said Kenya and the East African region are currently experiencing a wheat shortage because of the crisis in Russia and Ukraine.

Kenya ordinarily imports over 60 percent of the wheat supply from Russia and Ukraine combined.

“But with the crisis between the two countries, we are currently not able to access that wheat and we are therefore staring at a shortage and Kenyans are already starting to feel it,” said Masila.

He further explained that due to the crisis, for the last couple of months, prices of wheat in the world have continued to increase due to the lack of supply.

“We have seen prices increase to over (580 dollars) Sh67,000 per ton of the wheat being offered in the world market up from an average of (280 dollars) Sh32,000 per tonne,'' Masila said.

He added that the price has almost doubled and this means we are going to see an increase in the price of wheat products in the country including bread and other products made from wheat.

To address this problem, grain trade stakeholders have been looking at alternative sources to feel in the gap that has been created by the Russia-Ukraine crisis.

Masila said one of the sources they have identified is Serbia, and that the Serbian Government has allowed the exportation of 150,000 metric tons of wheat to the world.

Dragan Zupanjevac, Serbia's Ambassador to Kenya said the Northern part of Serbia which borders Romania and Hungary is a grain basket.

“We are high producers and have a surplus of both wheat and maize and in the past, we have exported some wheat to Kenya. Our exporters have silos at the Romanian Port of Constanta from where they ship throughout the world and some wheat has been coming to Kenya,” he said.

He revealed that he has been in talk with the EAGC to see whether Serbia can step in to avert a crisis with the supply of wheat in the coming months.

When the Ukraine-Russia crisis started, Serbia imposed a ban on exports to meet their local demand, but they have now liberalized this and they have allowed the exportation of 150,000 metric tons.

“We do not want to benefit because of problems in other countries but we also do not want to miss out on an opportunity. Serbia can play a big role in filling the wheat supply gap within East Africa,” said Zupanjevac.  

Masila added that to mitigate the wheat shortage, they are also trying to source the commodity in India.

“India has had a good crop of over one million metric tonnes production, and that even the crop that is going to be harvested soon looks like goods and they are already selling to a lot of their neighbors and other African countries,'' he said.

He added that EAGC and CMA and other stakeholders have been engaging with the Government of Kenya to look at the possibility of importing Indian wheat,” he said.

But there is a ban that was issued by Kenya Plant Health Inspectorate Services (KEPHIS) on the importation of wheat from India due to the fungus Tilletia Indica or Karnal Bunt (KB) named after the town of Karnal in India where it was first identified.

Masila urged the Government to address the sanitary and phytosanitary concerns and risk issues and put in place measures that can give assurance to Kenyans and avail the opportunity to import wheat from India.

Paloma Fernades, CEO of Cereal Millers Association said last month during an interview with the Star that India had a bumper wheat harvest between the period of March and April 2022.

“Indian wheat is significantly cheaper than the rest of the world selling at a discount of about $50-80 dollars cheaper than world wheat which is at almost over $500 per tonne,'' Fernades said. 

Currently, Nigeria, South Africa, Oman, Egypt and Israel have approached India to supply wheat to meet their demand. Tanzania and Uganda have also been allowed to purchase wheat from India.

“We are unable to import from India yet our neighbours are set to bring in the commodity hence more competitive than us in the market interms of wheat,” she said.