MASERU — Lesotho Flour Mills made a dramatic U-turn this week when it announced there will be no major price increases for grains following the stabilisation of prices on the international market.
The milling firm is the sole agri-business company in Lesotho and supplies the country with maize-meal, flour and livestock feed.
In an interview with the Lesotho Times on Monday, the company’s managing director Ron Mills said international prices of maize had declined from last week.
“There are no real threats expected should the prevailing conditions remain unchanged,” Mills said. “The recent movement in prices will not result in major changes in prices.”
Mills’ comments come hardly a month after the milling company told the market to brace for a spate of price increases for grains.
Grain farmers are said to be worried by the low prices quoted on the international market.
There have been reports that South Africa had a large surplus of grains and was having serious problems in disposing of its stocks.
This had forced farmers in that country to plant less maize.
Mills said increases in oil prices will have an impact on food prices on the domestic market.
The milling company imports over 90 percent of its grain inputs from neighbouring South Africa while the rest is bought from local farmers.
The company produces 65 000 tonnes of wheat flour as well as 80 000 tonnes of maize-meal for domestic consumption.
It also produces livestock feeds.
“From our observation we find that the local farmers produce on a small scale and mostly supply the market where people use small hammer mills,” Mills said.
The price for a tonne of yellow maize has been set at M1 377, Mills said. White maize is at M1 298 a tonne. Wheat is at M2 675 a tonne.
He said soya beans and sunflower currently attract higher prices but there is no local market for the commodities.
“The challenge for local farmers with sunflower and soya beans is that there is no local market for the produce. There are no companies processing those products locally,” Mills said.
He said the global financial crisis had seriously affected the sector as people lost jobs which consequently reduced consumption.
“We need customers who have jobs as people need a regular income to be able to sustain their livelihoods,” Mills said.