Kenya competing with China for maize in global markets

The world’s second-largest economy is diversifying its corn source markets from the US to South Africa and Latin America such as Brazil, which are key buying destinations for Kenya’s imports currently.

China seems to be expanding trade deals with its allies in the BRICS which comprises Brazil, Russia, India, China and South Africa, who are counteracting the US grip on the world.

The move by China will complicate matters for Kenya, which is relying on imports to address the runaway cost of flour that now stands at Sh208 for a two-kilogramme packet.

High demand for maize by China will pile more pressure on the price of the produce that is already high curtailing millers’ and traders’ ability to import the grain.

The Asian giant is cutting overreliance on the US as geopolitical conflict and growing tension between the two countries continue to rise.

Already, China’s largest food processor-COFCO has signed deals with 43 South African farms –with more than 173,000 acres of farmland – to be its long-term suppliers, according to local media in China.

South Africa is the largest producer of both yellow and white maize on the continent with regional countries depending on it to bridge their deficits for both human consumption and animal feed.

China is importing both white and yellow maize, meaning that there will be no reprieve for animal feed manufacturers who have been banking on a duty-free window of yellow produce to arrest the rising cost of feed.

The latest move by China is reminiscent of the 2020 move by Beijing to mop up all the soya from Zambia and Malawi-Kenya’s main source market for the commodity, by offering top dollar price per unit.

The move created a shortage of the commodity, leaving feed manufacturers with limited stocks that pushed the cost of feeds to a historic high.