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In response to the expected shortage, Kenya's Dairy Authority has relaxed restrictions on milk powder imports from Uganda. This allows Ugandan producers to increase their exports to Kenya during these dry periods.
“Kenya is to increase the number milk importation permits to more milk powder from Uganda which they have been restricting to be landed on their market,” Akankiza Mpiira, executive director at Uganda’s Dairy Development Authority said.
Ugandan Producers Poised to Benefit (Except One)
Ugandan milk powder producers are well-positioned to take advantage of this opportunity. However, Brookside Uganda, a major producer owned by Kenya's former first family, remains excluded due to an ongoing ban on their products.
This leaves Pearl Diaries and Amos Diaries to take advantage of the milk powder market in Kenya, but the two are also not exporting as much to Kenya, which continues to keep out Uganda’s milk powder to create a market for liquid milk, especially during times of overproduction.
While the Kenyan market presents an opportunity, Ugandan producers face some hurdles. Firstly, other Ugandan producers haven't been exporting large quantities to Kenya historically. Secondly, Kenya prioritizes its own liquid milk production and may restrict powder imports to protect that market.
Uncertain Algerian Market Dampens Enthusiasm
Ugandan producers had previously secured a deal to export milk powder to Algeria. However, low prices offered by Algerian buyers and high shipping costs due to piracy concerns have discouraged them from pursuing this market.
Despite these challenges, Uganda's dairy industry continues to be a significant contributor to the national economy. It provides jobs, improves food security, and attracts foreign investment.