Is ncpb’s kes 2,800 per bag a bad price?

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Last Sunday, December 21st, Deputy President William Ruto announced that government will buy maize from farmers at a price of KES 2800 per 90 kg bag. This is KES 600 rise from the quoted prices by agriculture Cabinet Secretary Felix Koskei earlier that week.

This new prices are a good relief for  farmers since maize prices in majority of the towns has been worsening and is set to decline further with other maize producing area set to begin harvesting in this month of December and early 2015.

Prices had dropped from an average of KES 2800 per 90 kg bag since the beginning of October to KES 2500 per 90 kg last week, 11% average price decline. Nakuru and Kisumu traders were hit hard as maize prices in these towns dropped by 25% and 19% respectively with price variation rate in these 2 towns exceeding 10%. The other 3 towns maintained stable prices with less than 5% variation rates.(check out the entire trends here)

Most of the National cereals and produce board depots are based around Uasin Gishu and Tranzoia counties. These two counties are among the major Maize produce areas. When you look at price trends in Eldoret, the major town in Uasin Gishu county, maize has been averaging at KES 2300 per bag, KES 500 lower than the new set NCPB price. Government buying maize at KES 2800 per bag in this area is therefore a reasonable price given the pressure from the free trading forces in these markets. Don’t you think so?

cover image source: wikipedia

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