Consumers Rush to Buy Unga at Sh100 as retailers seek Sh175m Refund

There was a countrywide rush yesterday as Kenyans took advantage of the decree by President Uhuru Kenyatta that the price of a two-kilogramme packet of unga should retail at Sh100 countrywide.

In the latest deal, the government demanded that Cereal Millers Association (CMA) members sell all maize flour brands at subsidised rates to retailers and distributors countrywide. The rush was followed by confusion, as retailers showed mixed reactions to the implementation of the subsidy.

 Consumers countrywide have purchased the commodity in bulk as most retailers scrapped the Sh230 price tag. They now urged the President to negotiate with petroleum and cooking oil companies to reduce the exorbitant prices of their goods and services.

Some noted that certain shops had defied the order and were selling the commodity at a high price (Sh210-Sh230), urging the President to enforce the order.

A shop attendant said they were advised by their suppliers to reduce the price, and later directed to reverse the decision.

“It is true that prices had gone down from 9 am but, at around 9:20 am, we received a call from our suppliers to revert to the previous prices,” the attendant said.

The supermarket’s management, however, said the government had not issued a Gazette notice to act as legal backing for the price cap; and therefore they were not in a position to reduce the prices.

As per spot check yesterday afternoon established that maize flour in most outlets in Mombasa was retailing between Sh99 and Sh211. Chandarana Supermarket in Nyali was among the outlets that implemented the subsidised prices, with all maize flour brands available Dola, Ajab and Pembe selling at Sh99.

“This is old stock but we received a directive from our bosses at the headquarters to implement the subsidised prices. We don’t know what our bosses have agreed with the Government. Ours is just to do as they say,” said a customer care attendant.

Early birds at A-One Supermarket experienced relief for 20 minutes between 9 am and 9.20 am before the price was again changed from Sh100 to the initial price, depending on the maize flour brand.

Explaining the uncertainties in the cost of the commodity, Wambui Mbarire, the chief executive officer of Retail Traders Association of Kenya (Retrak), said in a statement that the agreements came at a time when retailers were already holding about 750 tonnes of unga which were to retail at the previous cost of Sh230.

“While the new price tags are affixed, our analysis indicates that, as at close of business on July 20, retailers affiliated with Retrack were holding unsold stocks amounting to more than 750 tonnes,” she said.

The association notes that fast-moving commodities such as unga are paid for in advance by retailers, or on very thin credit terms which do not exceed 14 days.

Following the unga subsidy, retailers have commenced engagements with their respective suppliers to recover more than Sh175 million, which is a cumulative estimate of the higher price earlier paid by them to facilitate deliveries.

Meanwhile, some maize millers have increased their daily production to meet the increased market demand just one day after the government deal. 

President Kenyatta, however, failed to disclose the amount of money the government would spend, only for the Ministry of Agriculture to say millers would be offered an undisclosed subsidy to bring down the cost of the staple.

To bolster the programme, an oversight committee will be formed with representatives from Cereal Millers Association, the Ministry of Agriculture and the National Treasury.