WFP sees its Ugandan food purchases rising by 40 pct
* Price slump boosted UN body's Ugandan food purchases
* WFP to spend $100 million per year on Ugandan food by 2011
KAMPALA, May 26 (Reuters) - The U.N. World Food Programme (WFP) will spend 40 percent more buying food in Uganda this year, as it uses low prices to shore up reserves, a senior WFP official said on Wednesday.
Uganda harvested a bumper maize crop during late 2009 and the first quarter 2010, flooding markets and triggering a plunge in prices.
This year, the Ugandan government said the country's 2009 maize output was estimated at between 1.6 million and 1.8 million tonnes from 1.26 million tonnes in 2008. [ID:nLDE61N1K1]
"So far by the end of May ... we'll have purchased almost $25 million worth of food commodities in Uganda," WFP Uganda country director, Stanlake Samkange, told Reuters.
"That's a bit ahead of where we were last year and I think by the end of the year we'll be in the $60 to $70 million range, which will be a significant increase over last year's $50 million," he added.
Last year WFP bought 120,000 tonnes maize and beans in Uganda, and it aims to increase its annual local food purchases to $100 million by 2011.
The U.N. food agency provided food to 2 million Ugandans last year, much of it imported, as two decades of civil war in parts of the country combined with droughts, to affect harvests. [ID:nL1615577]
But for the last five years, the WFP has been increasing local food purchases, partly to boost farmers' livelihoods.
In 2009, the WFP spent $15 million upgrading Uganda's warehousing infrastructure as it anticipated that lower maize prices would work in their favour for both value and volume, WFP officials said.
WFP has been paying an estimated $210 for a tonne of maize in 2010, from last year's average of $380, Samkange said.
WFP prices are usually slightly higher than the prevailing market rates, as it seeks to improve farmers' living conditions.
Although the country's grain production surged last year, lack of processing and storage facilities limits the amount Uganda can sell to top-quality buyers like WFP and others on the international market.
Uganda has only seven certified warehouses with a storage capacity of an estimated 30,000 metric tonnes per year, according to the Uganda Commodities Exchange (UCE).
(Reporting by Elias Biryabarema; editing by Michael Taylor)
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