Grain sector players move to ease maize shortages as demand shoots up

Rwanda had a good harvest for both grains and cereals last season, which attracted huge demand from regional buyers. This has benefitted farmers in terms of better revenues earned, but has also created big grain shortages on the local market and pushed up prices of beans and maize, according to the Rwanda Grains and Cereals Corporation. Wenslars Bahati, the Rwanda Grains and Cereals Corporation (RGCC) operations manager, told Business Times that traders from the region were even buying grain with high moisture content to dry and clean it themselves, while local buyers waited until the produce was fully dry. “Traders from Uganda and Tanzania were buying grain that had 21-25 per cent moisture content because they have good post-harvest handling facilities and skills, but for us we had to wait until the moisture content was 16 per cent. This put us at a disadvantage leaving us to fight for the little produce left on the market,” he said in an interview. RGCC is currently buying first grade maize at Rwf380 a kilo, up from Rwf280 previously; Rwf370 for second grade and third grade is at Rwf360, with the ‘undergrade’ going for Rwf350 per kilogramme. Traders and millers in Huye District, Southern Province, quoted a kilogramme of maize also at Rwf380, an increase from Rwf200 over the past two months, but said the prices were still rising. Beans are at Rwf320, down from Rwf500, thanks to the onset of the harvest season. In Eastern Province, the main maize producing areas, maize goes for Rwf330 per kilogramme when buying from farmers, and traders sell the grain at Rwf350 in Nyagatare and Gatsibo districts, while beans have shot up to Rwf450 per kilogramme from farmers, and Rwf500 from produce dealers. Cassava flour is at Rwf600 a kilo in Huye, up from Rwf450, while that of sorghum costs Rwf450 from Rwf400 previously. Maize is one of the main foods consumed in Rwandan homes, with the country’s total maize demand estimated at 900,000 tonnes per annum, according RGCC. “This is the first time in the history of the grain sector that prices have skyrocketed to this level immediately after the harvest season. What will happen in coming months with the fall armyworm attack?” Rwanda Grains and Cereals Corporation’s Bahati wondered. RGCC projected the shortages to widen both locally and in the region as neighbours Tanzania, the DR Congo, Uganda, and even Kenya are also experiencing grain shortages. New factories that have opened shop in Kigali and use grains and cereals as raw materials, like Africa Improved Foods, have also added pressure on the stock sending prices up, according to Bahati and Olivier Ngoga, the East Africa Exchange (EAX) operations manager. Kigali-based EAX is a regional commodities exchange for grains and cereals. Bahati predicted the maize prices to settle at Rwf400 by August (with additional supply from the region) before coming down to about Rwf300 a kilo. Farmers, millers speak out Produce traders and millers in the Southern and Eastern provinces attributed the increase to various reasons, including disease and drought that led to poor maize harvest and eventual shortages. Jacques Nkurunziza, a maize miller in Mukoni village, Cyarwa cell in Tumba sector, Huye District, said millers are counting losses, adding that the 2017 season, which started from September 2016 to February 2017, was a big challenge for maize millers and farmers because of the maize mosaic disease and drought that affected the crop. He told Business Times that a kilogramme of the grain was at Rwf380 in Huye from between Rwf200 and Rwf250 two months back. Nkurunziza said he used to harvest over one tonne of maize previously, but his yield was just 200 kilogrammes last season due to maize mosaic and drought. Aloyz Sibomana, a member of KOASIMU, a maize millers’ cooperative in Huye, said the cooperative managed to buy only 10 tonnes of maize last season compared to 40 tonnes procured during a similar season in 2016. For the ordinary man, the situation has been made worse because Huye has many institutions that compete for the grain with residents and buyers from neighbouring countries, including Burundi, Tanzania and Uganda, he added. Pierre Celestin Gatsinzi, a maize trader in Huye town, said shortage of sorghum in the district has also compounded the problem. Meanwhile, Grace Uwimana, the president of KABOKU, a cooperative of maize and beans growers in Kagitumba, Matimba Sector in Nyagatare District, Eastern Province, said the prices were expected to continue the upward trend. “We didn’t have enough rains in Nyagatare, especially for maize because the crop needs more rains compared to beans. So, we expect the prices to increase further in the coming months,” he told Business Times. But Viateur Hakizimana, a model farmer in Rwimbogo, Gatsibo District, said most of last season’s harvest “went out of the country”. Hakizimana, who is also a beans and maize trader, however, was positive the prices of beans could drop soon because the crop is about to mature in Gatsibo. “Though this season is normally not for growing maize, the problem has been aggravated by the fall armyworm that has damaged crops,” he said. Hakizimana said the maize scarcity would lead to further price increases. Authorities speak out Aimable Nsengiyumva, the Huye District agriculture officer, said the scarcity of maize grain is not only in the district, but the whole province. “The maize harvest was insufficient but it is being competed for by too many buyers,” Nsengiyumva said. “The shortage of grains across the countrywide was caused by the long dry spell the country experience last year and maize mosaic that destroyed plantations. This greatly affected the harvest of last season and has resulted in price increases because demand has outweighed current grain supply,” Nsengiyumva explained. Consumers react Baptiste Muneza, a resident of Huye town, said the increase in both grain and maize flour prices has affected the life of many people. He said maize meal is a staple of many households in Huye and the country generally,adding that many are struggling to find what to eat. He was, however, optimistic the coming harvesting season in June could help ease the problem. Mary Mukandanga, said maize meal, and steamed maize grains mixed with beans are some of the cheapest foods used by poor households. “Other kinds of foods are expensive, meaning that poor households no longer eat three meals a day,” she said, adding that the increase in maize flour prices has hit hard university students living in Huye as most of them depend on posho. Shortages affect RGCC, EAX commitments, targets He said RGCC has orders of up to 10,000 tonnes of grain and cereals from different clients, but has so far managed to supply only 20 per cent of this and does expect to meet 50 per cent of the total commitments. The grain corporation supplies the national strategic reserves and Rwanda Correctional services, Africa Improved Foods, World Food Programme, Minimex and EAX, among others. “We have now resorted to buying from small produce traders, but at a higher price to be able to supply these orders,” he said. He said the Eastern Province which is the main producer of grain and cereals all had a poor crop, except Nyagatare and Gatsibo districts. The harvest in Kirehe, Ngoma and Kayonza districts was below target, he added. Ngoga said EAX bought over 6,000 tonnes of produce through the whole of last year, but this was sold off in the first three months of 2017. Previously, EAX would store the grains for up to four months before selling off the produce, but rising demand has changed all this, he noted. This has left the commodity exchange in a hard situation as it tries to meet its commitments with contract customers. Interventions Bahati said RGCC will import grain from the region as the immediate intervention to stabilise the market and ensure prices “don’t go extremely high”. He said RGCC was also watching the local and regional markets closely. He added: “In the event the expected supplies from the region doesn’t come through, we will go south to Mozambique, Malawi and Zambia,” he said. EAX targeted to trade about 35,000 tonnes of grain this year, but this looks unlikely to happen with the current grain shortages in the country, he added. “So we are now going to source from the region to get as much grain as possible to meet commitments,” he said. More interventions Bahati also called for increased access to improved seed and other inputs like fertilisers. He added that farmers should also embrace modern methods like crop irrigation, arguing that this will enable them to produce throughout the year without depending on seasonal rains. Bahati said the challenge of lack of warehouses and facilities like driers and cleaners is hurting the sector and needs to be addressed immediately so that farmers do not sell off the produce immediately it’s harvested. The official said farmer cooperatives lack the capacity to build warehouses or ensure proper handling because of the high cost involved. Country food secure Dr Gerardine Mukeshimana, the minister for agriculture and animal resources, assured Rwandans at the end of last month, saying the country is food secure despite fall armyworms ravaging maize plantations in parts of the country. The pest has so far ravaged an estimated 15,699 hectares of farmland or a quarter of the country’s total area of 63,499 hectares planted with maize. This represents about 5 per cent of the total cultivated land countrywide this season. “The armyworms will not seriously impact food security because maize was not cultivated in large areas during season 2017B,” Mukeshimana is quoted as saying. “Up to 95 per cent of the total cultivated land this season (1,300,000 hectares) is covered by other crops, which will sustain food security.”

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Grain sector players move to ease maize shortages as demand shoots up