Kenya has suspended imports of powdered milk, a development that is set to badly affect Uganda.
In a notice dated March 6, the Kenya Dairy Board, KDB, said it was moving to protect local farmers from external products as output is expected to increase soon.
“In anticipation of the long rains, the Government has stopped the importation of milk powders to cushion the industry from surplus production and low prices,” read a statement signed by Margaret Kibogy, the KDB Managing Director.
Ms Kibogy said that the Board shall no longer issue new import permits until further notice.
While the letter does not specifically mention which countries are affected by the ban, the move has been received with consternation from across the region.
This comes two months after Kenya President William Ruto said milk imports from Uganda should be allowed into the country and the more expensive Kenyan milk be processed for the international market.
However, there have been continuous calls from both the industry and the political leaders in Kenya to ban milk from Uganda because it is cheaper and outcompetes the Kenyan products on the market.
Kenya is Uganda’s major milk market but the constant barriers have prompted the search for wider markets, especially in the Democratic Republic of Congo, South Sudan, Zambia, and Algeria.
The Dairy Development Authority (DDA) said that for dairy products like casein, whey protein powder, UHT milk, and milk powder, the main destinations have been United Arab Emirates, Syria, Japan, Oman, USA, Nepal, and Bangladesh.
Processed milk accounts for more than 35 percent of Uganda’s marketed milk, according to DDA. It is not known how much of the milk powder is exported to Kenya.
Recently, DDA Executive Director, Samson Akankiza said the Kenyan market was now fully open for Uganda’s dairy products, while talks are on with Algeria for the export of powdered milk.
The announcement by KDB came hardly a day after Kenya’s Deputy President, Rigathi Gachagua vowed that the government would ‘break the monopoly’ in the milk and gas sectors so as to bring the prices down.
Speaking at a church service in Nairobi on Sunday, Gachagua said that for a long time the milk industry was dominated by one person who has bought off all other companies and that the same went for gas.
It is said that Mt Kenya and Brookside, which control more than half the market, are majority-owned by the Kenyatta family, while political ally Raila Odinga owns East African Spectre, the main petroleum gas supplier in Kenya.
“We need to open up that sector to competition so that farmers can get a fair deal. The days of monopoly are over, and we will not let a few individuals continue to exploit Kenyans,” Gachagua said.
He insisted that this was not a political witch-hunt by a move aimed at improving the livelihood of Kenyans.
“They wanted to continue with state capture and monopoly, but that has come to an end. We are going to open up the milk and gas industry so that we can end monopoly for the benefit of Kenyans,” Gachagua asserted, adding that one person has been buying up all the companies and selling milk at inflated prices.
In 2015, Brookside acquired Sameer Agriculture and Livestock Ltd which had earlier acquired the assets of Fresh Dairy from the Dairy Corporation of Uganda.
Effectively, Brookside became the leading milk buyer, processor, and exporter in Uganda.
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