Ugandan Dairy Companies Raise Alarm Following Kenya Directive

by Brian Kimani on Tuesday, 30 May 2023 – 1:22 pm

President William Ruto (left) and his Ugandan counterpart Yoweri Museveni during a meeting in Uganda in August 2022.

Dairy processors from Uganda raised an alarm over incurring losses following a directive by the Kenyan government which limited milk products entering the market.

Speaking to Ugandan journalists, the country's industry regulator, the Dairy Development Authority (DDA), noted that Kenya slashed the number of export permits by an average of 20 per cent.

Samson Akankiza, DDA Executive Director, stated that this affected the dairy stock prices in the country as farm-gate milk prices dropped from an average of Ksh1,600 to Ksh550.

This represented a 60 per cent decline in prices of the crucial commodity, creating a ripple effect and hitting revenues.

President William Ruto (right) meets President Yoweri Museveni of Uganda in Uganda's State House on April 27, 2023.

“I don’t have figures off-head but the reduction is about 20 per cent. Other products are getting permits except for milk powder but the market is still open and Uganda milk players are exporting products there," Akankiza stated.

Further, Uganda Manufacturers Association appealed to President Yoweri Museveni's government to engage Kenya over the ban.

Mike Mukula, Uganda Clearing and Freight Forwarders' Association patron urged the parties involved to resolve the stalemate by finding a lasting solution.

"It is important to quickly move as a country and solve this matter at a corporate and bilateral level to ensure that milk farmers and those involved in the dairy sector do not incur losses," he noted.

On March 6, 2023, the Kenya Dairy Board announced that the government had stopped the importation of milk powders to cushion the industry from surplus and low prices owing to expected rains at the time.

A few weeks later, the ban was suspended following discussions between the two governments. This, however, led to a reduction in the volume of importation of milk powder into the country.

A past report by the EastAfrican indicated that Kenya was the leading buyer of Uganda’s milk in 2020, with imports valued at Ksh19 billion.

President William Ruto while addressing African Private Sector Dialogue on the African Continental Free Trade Area (AfCFTA) in Nairobi on Monday, May 29, 2023.