DAR ES SALAAM, June 26 (Reuters) - Tanzania banned grain exports on Monday in a bid to stem rising local prices and rein in inflation, as well as boost the country's nascent food processing industry.
Food is the biggest driver of inflation in the East African nation, which exported more than 1.5 million tonnes of cereals to neighbours in 2016, the agriculture ministry has estimated.
Government officials have also previously warned that, with the trade largely unregulated, food exports were causing shortages in the local market and threatened to drive up the rate of inflation even further.
"From today onwards, it is strictly prohibited for anyone to export food crops," Prime Minister Kassim Majaliwa said in a statement, adding the move aimed at "encouraging the construction of (food processing) industries in the country,"
"Anyone who is arrested trying to smuggle food out of the country will have both his consignment and the vehicle used in the smuggling operation nationalised," he added.
Tanzania's inflation rate slowed to 6.1 percent year-on-year in May from 6.4 percent a month earlier, but remains higher than the country's mid-term target of 5 percent.
Despite producing around 3 million tonnes of surplus food in the 2015/16 harvest season, officials say unregulated exports have dwindled food reserves in a nation struggling with drought.
In February, the government said over 1 million Tanzanians were facing food shortages in the country of over 50 million.
In a report, the U.N. Food and Agriculture Organisation (FAO) said drought in East Africa has sent prices of staples such as maize and sorghum soaring in the region, reaching record and near-record levels in parts of Ethiopia, Kenya, Somalia, South Sudan, Uganda and Tanzania.
The body said crops in East Africa had been depleted by drought exacerbated by the El Nino weather phenomenon that ended last year, and poor and erratic rainfall in recent months. (Editing by Aaron Maasho, editing by David Evans)