Report Highlights:

FAS/Nairobi forecasts a marginal increase in corn production in Kenya in the Marketing Year (MY) 2016/2017 because of Government of Kenya (GOK) and county governments' support to farmers. Wheat production will remain flat as farmers respond to lower prices. The continued subdivision of large wheat farm makes wheat farming increasingly unviable. Rice production is forecast to record a modest increase. Consumption of the commodities will continue to outstrip production, leading to imports.

Corn

Kenya's corn production remains constrained by underlying factors such as soil acidification due continuous multi-year use of Diamonium Phosphate (DAP) fertilizer, lack of access to improved seeds, and the impact of maize lethal necrosis (MLN). The Government of Kenya (GOK) and the county governments in the corn growing areas have initiated measures to increase yields including distribution of certified seeds and alternative fertilizers to farmers. GOK is also implementing the second pilot phase of the Galana/Kulalu irrigation project in the North Coast region, and production on a further five hundred thousand hectares is expected in the MY 2016/2017. In addition, GOK has put up drying and storage facilities in the corn growing areas to reduce postharvest losses and limit aflatoxin contamination. United States Department of Agriculture (USDA) is supporting capacity building in post-harvest, aflatoxin, and MLN management under the Cochran and Borlaug Fellowship programs.

Corn

2014/2015

2015/2016

2016/2017

Market Begin Year

Jul 2014

Jul 2015

Jul 2016

Kenya

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

1650

1650

1700

1700

1700

Beginning Stocks

415

415

210

215

260

Production

2650

2650

2800

2800

2850

MY Imports

900

900

1000

1000

1000

TY Imports

900

900

1000

1000

1000

TY Imp. from U.S.

0

0

0

0

0

Total Supply

3965

3965

4010

4015

4110

MY Exports

5

0

5

5

0

TY Exports

5

0

5

5

0

Feed and Residual

350

350

350

350

360

FSI Consumption

3400

3400

3400

3400

3450

Total Consumption

3750

3750

3750

3750

3810

Ending Stocks

210

215

255

260

300

Total Distribution

3965

3965

4010

4015

4110

(1000 HA) ,(1000 MT)

Notes on PSD Table

  • In MY 2015/2016, Kenya's corn production increased due to effects of higher rainfall in the marginal corn growing areas attributed to the El Nino weather phenomenon
  • Area harvested in 2016/2017 is forecast to remain as in the previous year; newly opened- up land in the Galana/Kulalu project area will be offset by loss of land to other crops in the North Rift Valley region
  • Modest production increase in 2016/2017 is forecast due to impact of alternative fertilizers and first time harvests at Galana/Kulalu project
  • A modest growth in consumption is expected due to increased use of corn in animal feeds
  • Corn imports are forecast to remain flat

Corn remains the staple food crop in Kenya and consumption is expected to continue increasing despite the diversification of Kenyan diets. The livestock sector is also growing, and demand for corn in the manufacture of animal feeds is also expected to increase. FAS/Nairobi forecasts that imports will remain steady in MY 2016/2017 to offset the supply deficit. The imports will most likely be from the East African Community (EAC) countries due to the steep EAC common external tariff currently set at 50% ad-varolem. In addition, the import ban on genetically modified (GM) products that is still in place locks out imports from countries that produce GM corn.

Retail prices for corn and corn products have decreased after Kenya's National Cereals and Produce Board (NCPB), a GOK agency, lowered the purchase price for the strategic reserves in 2015 from Ksh 3,000 ($30 USD) per 90 kg bag to Ksh 2,300 ($23 USD). Some of the farmers in key corn growing areas reacted to the price changes by diversifying to other crops. NCPB's corn purchase price is still far higher than the prices offered to farmers in the neighboring EAC countries, creating an incentive for imports from these countries.

Wheat

FAS/Nairobi forecasts both area under wheat and production in Kenya to remain flat in 2016/2017. In the MY 2015/2016 a modest expansion in area, coupled by favorable weather conditions increased wheat production to 450,000 tons. Further increases in production are hindered by the widespread recycling of seed by farmers contributing to prevalence of the wheat stem rust (Ug99) disease. In addition, subdivision of family-owned farms into smaller units for inheritance purposes continues to hinder efficient wheat farming in Kenya.

Wheat consumption in Kenya is expected to continue increasing due to changing dietary patterns and a robust food service sector. A growing preference for wheat products is evident across the income groups in both rural and urban areas, with both commercial and home-baking becoming common. Demand for wheat products is also evident in the growth of pasta, confectionery and breakfast cereals sectors, while a limited amount of wheat is also used in the manufacture of animal feeds.

Kenya's wheat production is less than one quarter of its annual demand, and the deficit is offset by imports. The bulk of the wheat imports are from Russia, Ukraine, Lithuania, Estonia, Germany, Poland, and Australia. Wheat imports from the U.S. are primarily for Food Aid programs. Imports into Kenya by registered regional millers are assessed a 10 percent ad-valorem tariff; otherwise the EAC external tariff of 35 percent applies. FAS/Nairobi forecasts a modest increase in wheat imports in the MY 2016/2017. Wheat exports from Kenya are minimal, and attributable to limited cross-border trade with the neighboring countries.

Wheat

2014/2015

2015/2016

2016/2017

Market Begin Year

Jul 2014

Jul 2015

Jul 2016

Kenya

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

170

170

175

175

175

Beginning Stocks

274

274

362

289

329

Production

450

420

420

450

450

MY Imports

1523

1455

1600

1500

1550

TY Imports

1523

1455

1600

1500

1550

TY Imp. from U.S.

48

38

0

0

0

Total Supply

2247

2149

2382

2239

2329

MY Exports

10

10

10

10

10

TY Exports

10

10

10

10

10

Feed and Residual

150

150

150

150

150

FSI Consumption

1725

1700

1800

1750

1800

Total Consumption

1875

1850

1950

1900

1950

Ending Stocks

362

289

422

329

369

Total Distribution

2247

2149

2382

2239

2329

(1000 HA) ,(1000 MT)

Rice

Rice in Kenya is mainly grown in irrigation schemes that are managed by the state-owned National Irrigation Board (NIB). In addition to the irrigated Basmati rice, the GOK and county governments are promoting production New Rice for Africa (NERICA), an improved, rain-fed, upland rice variety. The NIB has also been rehabilitating and expanding the existing irrigation schemes, and the area under rice has increased gradually.

Rice consumption in Kenya continues to increase rapidly due population growth, changing dietary preferences, higher incomes and urbanization. Consumption growth is estimated at 11 percent per year and the supply deficit is met by imports from Pakistan, Vietnam, Thailand, and India. There are also minimal imports from neighboring EAC countries. Effective July 1, 2015, EAC common external tariff of 75 percent ad valorem or $345 USD per ton (whichever is higher), is applicable to rice imports from non-EAC countries. Kenya was however granted a one year extension of “the stay of application", based on limited local production, and therefore continues to apply the 35 percent ad-valorem or $200 USD per ton (whichever is higher), tariff structure. This waiver is reviewed every year by the EAC secretariat.

Rice, Milled

2014/2015

2015/2016

2016/2017

Market Begin Year

Oct 2014

Oct 2015

Oct 2016

Kenya

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

35

35

35

35

40

Beginning Stocks

144

144

101

124

104

Milled Production

102

70

99

90

100

Rough Production

155

106

150

136

152

Milling Rate (.9999)

6600

6600

6600

6600

6600

MY Imports

420

420

460

450

460

TY Imports

450

450

460

460

470

TY Imp. from U.S.

0

0

0

0

0

Total Supply

666

634

660

664

664

MY Exports

10

10

5

10

10

TY Exports

10

10

5

10

10

Consumption and Residual

555

500

555

550

560

Ending Stocks

101

124

100

104

94

Total Distribution

666

634

660

664

664

(1000 HA) ,(1000 MT)