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Proper grain storage infrastructure can be a marketing tool for market price discovery

MAIZE is one of the most important cereal grains grown globally and it is the basis for a significant portion of Sub-Saharan Africa’s staple food and in East Africa in certain.

The cultivation of maize in Tanzania based on government published data has increased, eclipsing other grains like millet and sorghum.

Thus, accepting the fundamentals of commodity market price formation and factors that may affect maize trade is perilous to evaluating the potential effects of government strategies and drivers; existing or proposed, as well as basis of trade agreements that may open Tanzania borders to competitors.

The overall price level of an agricultural commodity, whether at a major terminal, port, or commodity futures exchange, is swayed by a variety of market forces that can alter the current or expected traded volume. Maize production in Tanzania is swelling due to enlarged demand for domestic feed production within the region and replacement of pulses such as pigeon whose price hasn’t been inspiring.

Many of these forces originate from domestic food, feed and industrial-use markets and embrace buyer preferences and the changing needs of end users; factors moving the production processes; relative prices of crops that can substitute in whichever production, government strategies; and factors affecting storage, quality and transport.

Focus at the moment is on maize, especially for export market with greatest potential for Tanzania maize in Kenya and elsewhere according to BOT export trade data and calculations. There are still various constraints to enter to the export market through normal trade because of less competitiveness in terms of price and quality.

There are many quality concerns in maize trading, specifically due to moisture content and poor storage and handling managements. Maize amongst other cereals is a main staple crop farmed and spent for various uses by the bulk population in Sub-Saharan Africa.

Tanzania as part of Sub-Saharan Africa is classified amongst 19 top maize producing countries in the world and the first in East Africa. An assessment of economic survey of Tanzania point out that maize production indicates that, for the past few years, maize farming in Tanzania has been growing year to year.

Despite the steady farming and production of maize over years, post-harvest losses of maize alone keep on being the highest, up to 20-40 per cent in some of rural areas. Stunning on post-harvest loss, quickly one realises profit-making idea i.e. storage infrastructure, that if improved could help Tanzania to gain more from maize export.

Maize handling and storage is more than just having 50kgs bags each packed in four walls shed. What kind and what is the quality of warehouses used to store maize? What should Tanzania traders need to do to take advantage as main maize producer in the region?

Not while ago, Deputy Minister Hussein Bashe promptly visited restricted trucks with maize shipment at Namanga- Kenya boarder, trailed by Minister Adolf Mkenda, cited at variance in the media that Kenya’s verdict to restrict maize from Tanzania and Uganda was in fact in violation of the EAC agreed trade Protocol.

Whereas I wouldn’t judge latest maize cross border trade episode between Tanzania and Kenya, and later Uganda and Kenya, followed by Burundi with their own verdict between these east African nations was politicised, led my thoughts to believe that there is untapped business opportunity that continue unnoticed that could earn Tanzania a lot more if importance is taken into account on maize business.

Through designated finance and investment on correct storage warehouses for the maize, rice, cowpeas etc could not only improve ancillary services so that agribusiness in Tanzania could operate at full capacity, but reduce postharvest loss, generate source of employment and increase the level of food security in the EAC economic region.

Without mingling words for Tanzania maize traders, my message is there is a need for right drying, handling and proper storage to improve the maize quality and avoid Aflatoxin that can sometime turn out to be a disputed battle area that could lead to low price in the market contrary to prevailing market price.

Whereas we shouldn’t be proud of celebrating Kenyan statement that Nairobi hasn’t banned maize from Uganda and Tanzania over aflatoxin fears, in my view, is time to revisit our actions and strategy on grains handling and storage in Tanzania, given the nature of harvest seasons.

Argument regarding maize or other grain storage space is an area that I consider virgin to emerging industrialist and given our every year bumper harvest; Tanzania could shine out as grain traders for export, drawing in a lot of foreign exchange as an alternative of being caught in superfluous boarder trade combat over issues that could easily be dealt with.

I am made to understand that a well warehoused grains, dried well and all conditions suitable to make such products good for human consumption, direct as food or indirect as raw material for production of other products locally and internationally will always lead to price discovery for an industrialist.

In Tanzania, maize farmers in maize potential farming areas of Manyara region, Tanga region, Kilimanjaro region, Sumbawanga, Ruvuma, Songwe, etc. often discharge their full yields to the market immediately after harvest. Because of the mechanics of supply and demand, this is not always the best time to make the product available, as the prices drop when the market becomes saturated.

Herein, in my view lies an opportunity for an investor or entrepreneur or even for strategic financial aiming at financing start-ups making business along maize value chain. Currently, our market structure and the manner in which grains such as maize is managed is such that if the price falls so much, the farmer may not make any money at all.

Warehousing with appropriate technology and infrastructure processes in place to maintain the integrity and quality of the grain is what Tanzania need and not to politicise market quality inquiries. Maize stored for instance, without accurate determination of its moist level can be source of maize low quality thereafter.

Most measurement is a critical first step to determine is maize is sufficiently dried and properly stored. Storage of maize at the proper moist in my view will reduce mould growth and the production of aflatoxin.

If well established, proper handling and storage will offer solution for the farmers and provide a potentially lucrative opportunity for the player offering the storage space, while at the same time reducing aflatoxin fears taken as a factor in cross boarder maize trade.

Reflecting at Tanzania maize saga and related crossborder restriction recently viewed in the media is nothing else, but deficiency of proper storage infrastructure.

As I am writing this, I am ...

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Author: DR HILDERBRAND SHAYO

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