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Kenya: Food imports overtake fuel, machinery on 2017 drought

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Prolonged drought experienced in part of 2017 saw food imports rise to overtake fuel and machinery in the third quarter of the year, highlighting the distorting effect of bad weather.

Data released by the national statistics office shows the food import bill grew by 243 per cent from the Sh27.2 billion in the third quarter of 2016 to Sh88.2 billion in the three months to September 30, coming second only to industrial supplies.

During the period, fuel imports rose marginally from Sh55.2 billion to Sh67.9 billion while the bill on machinery and equipment fell from Sh83.2 billion in the third quarter of 2016 to Sh78.1 billion in the same period of 2017.

The value of industrial supplies, the single largest import item, increased over the period from Sh128.9 billion to Sh133.5 billion.

The Kenya National Bureau of Statistics (KNBS) data released last week provides a mirror image of the frenzied stock-up of key food items after the government eliminated duty on maize and sugar to tame shortage.

The race to build a safe level of national food stock widened merchandise trade deficit by 32.5 percent to Sh289.7 billion from Sh218.7 billion in the third quarter of 2016, the KNBS says.

“This (wide deficit) was mainly on account of increased imports valued on free on board basis that was driven by growth in the import bill of food and petroleum products in the third quarter of 2017,” states the national statistics agency
The scrapping of import duty on maize, which was extended up to December 31, specifically encouraged traders to stock up an adequate level of white maize, allowing millers to make a two-kilogram packet of flour available at Sh90.

The official data shows import of raw maize rose nearly 18-fold, from Sh1.2 billion in the third quarter of 2016 to Sh18.3 billion in the same period of 2017.

Apart from suspending duty on maize, the State also released Sh6 billion to ensure a standard price for flour across the country.

Other food items import in large quantities during the third quarter include wheat, whose bill expanded from Sh6.9 billion last year to Sh9.7 billion in 2017, and sugar which increased nearly nine-fold from Sh4.7 billion to Sh36.9 billion over the period.

On the other hand, export of food and beverage brought home hard currency worth Sh63.5 billion in the third quarter of 2017, up from Sh55.3 billion in the same period of the previous year.

Credit: Business Daily

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