…as Lesotho Four Mills increases maize meal, flour prices
LESOTHO Flour Mills (LFM) has increased maize meal, flour and livestock-feed prices by 10 percent due to skyrocketing input costs, the company’s Managing Director, Ron Mills, has said.
LFM sources most of its raw material from South Africa and produces various brands of maize meal, flour and stock-feed for the local market.
But according to Mr Mills, the ever-increasing cost of importing the raw material and related overheads had compelled the company to also raise the prices of its commodities.
“Consumers should expect a 10 percent increase with effect from Wednesday (17 Feb). We had already raised maize meal and flour prices by about 20 percent in the last three months, while animal feed went up by 15 percent,” said Mr Mills.
He said the increment was made later than their competitors because LFM had some remaining stock in their silos from last year.
“We stocked our silos with enough maize to last us three months. So when the prices of maize and other commodities were hiked in December, we did not feel the pressure to immediately adjust our ours because we were not yet buying,” Mr Mills said.
“Some of our competitors increased their prices by about 40 percent as early as January, so we still have a competitive advantage over them because our charges remained the same.”
The prevailing drought conditions, he said, were a contributing factor to the price increases due to the scarcity of maize in South Africa.
“The drought is impacting everyone including our competition. It has driven up prices and there are still more increases to come. In November, the price of white maize was at around R3 300 per tonne, and had been stable for about three months,” said Mr Mills.
“At the time, everyone was doing well, but it was also planting time for maize farmers in South Africa. Unfortunately, there was no rain in November and farmers have to plant by a certain time otherwise the maize does not grow.
“Each day it failed to rain in December, the white maize price went up by R100. During the holiday period, the maize price climbed to R5 250 per tonne in just five weeks, which is an all-time record high.”
The rand’s slump against other major currencies also negatively affected the prices of imported goods, he added.
“The major cause of price increases is our currency. Like Namibia and Swaziland, we are linked to the rand,” said Mr Mills.
“Unfortunately, the rand has lost almost 100 percent of its value over the past three years, which drives up the costs of imports.”