Maseru – Lesotho Flour Mills (LFM) is facing a challenging period due to the surge in raw white maize prices, a staple import for the company. The recent escalation in prices is a result of adverse weather conditions, particularly low rainfall and hotter than usual weather, affecting maize production in Southern African countries, including South Africa, a key supplier for LFM.
In a press release issued on Thursday, 4 April 2024, LFM revealed the underlying factors driving this unsettling trend. Following low rainfall and hotter than usual weather during the past two months across Southern African countries, LFM finds itself compelled to adjust maize meal prices to reflect the increased cost of raw materials.
The price of South African white maize surged by a staggering 39% within a span of just two months, catapulting from M3,800 per metric ton as of 31 January 2024, to M5,300 by 31 March 2024.The root cause of the price surge stems from a significant spike in South African raw white maize prices, a staple import for Lesotho Flour Mills.
As reported by Lesotho Flour Mills’s Chief Executive Officer, Mr. Fourie du Plessis, the price of South African white maize surged by a staggering 39% within a span of just two months, catapulting from M3,800 per metric ton as of 31 January 2024, to M5,300 by 31 March 2024.
This meteoric rise can be directly attributed to the adverse effects of the drought caused by the low rainfall and hotter than usual weather during the past two months. Mr. Du Plessis underscored the severity of the situation, emphasizing that the ongoing drought has dealt a significant blow to agricultural yields, particularly in South Africa, where maize production is anticipated to plummet by 20% below initial projections.
Such a shortfall inevitably translates to a substantial increase in maize meal prices, intensifying the plight of consumers already grappling with economic uncertainty.
Indisputably, the after-effects of this crisis extend far beyond national borders, as evidenced by Zimbabwean President Emmerson Mnangagwa’s declaration of a national disaster on Wednesday, 3 April 2024 due to drought conditions. With millions facing hunger, Zimbabwe urgently requires over $2 billion in aid to stave off the looming humanitarian catastrophe.
Acknowledging the profound impact of maize products prices on ordinary Basotho citizens, Lesotho Flour Mills remains steadfast in its commitment to mitigating the financial burden on consumers.
Despite the grim outlook, the Lesotho Flour Mills has thus far managed to limit price increases for April to 7%. However, with forecasts pointing to further escalations in the coming months, Lesotho Flour Mills is acutely aware of the need for proactive measures to ensure the continued affordability of maize meal for all.
In response to Lesotho Tribune’s questions regarding the specific proactive measures taken by Lesotho Flour Mills, the company stated that they are committed to continuously assessing the situation and implementing strategies to mitigate the impact on consumers to the best of their ability.
This includes optimizing the supply chain, exploring alternative sourcing options, and operational efficiencies, among other measures.
However, they emphasized the complexity of the situation, noting that predicting future price fluctuations with certainty is challenging.
Regarding the forecasted further escalations in maize meal prices, Lesotho Flour Mills stated that they are closely monitoring market trends and adjusting their strategies accordingly.
“While we cannot predict the exact trajectory of future price movements, we remain vigilant in our efforts to navigate these challenges and ensure continued access to essential food products for Basotho consumers,” LFM said.
As for the potential impact of a return to normal precipitation patterns on the ongoing crisis and the affordability of maize meal, Lesotho Flour Mills stated that it’s indeed a critical factor.
However, the interplay of weather patterns, agricultural production, and market dynamics is intricate and multifaceted. While improved precipitation may alleviate certain pressures, other factors such as global supply and demand dynamics also play significant roles.
In conclusion, while Lesotho Flour Mills appreciates inquiries, they emphasized the inherent uncertainty in predicting market movements. The company remains committed to transparency and proactive engagement with stakeholders as they navigate these challenges together.
