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Kenya's Unga Group Heads for One-Month High, Signs Uganda Import Agreement
Unga Group Ltd., a Kenyan maker of grain products, was poised for the highest closing level in a month as it signed an agreement to import as much as 4,000 metric tons of millet a year from Uganda.
The stock of the animal-feed and pasta producer rallied as much as 8 percent to 14.85 shillings and traded 1.8 percent stronger at 14 shillings by 1:02 p.m. in Nairobi. A close at this price would be the highest since Aug. 12.
Last week the company signed a memorandum of understanding for the imports with the U.S. Agency for International Development and the Ugandan unit of Equity Bank Ltd., which will provide financing to farmers, Managing Director Nick Hutchinson said in an interview in Nairobi today.
“We cannot get enough finger millet in this country,” he said.
The biggest buyer of millet in Kenya, Unga will import between 1,800 tons and 2,000 tons per season from farmers in Gulu, northern Uganda. The crop has two seasons in the East African nation, and the United Nations World Food Programme has put up a warehouse in Gulu to enable farmers to store the grain, Hutchinson said.
The WFP, which plans to build a second warehouse in Soroti, northern Uganda, is working with farmers who are returning to the area after having fled because of internal conflict.
Under the agreement, Unga will pay Ugandan millet farmers 585 Ugandan shillings ($0.26) per kilogram (2.2 pounds), or the market price, whichever is higher. The price will be reviewed before the start of every season, Hutchinson said.