Natfoods won’t raise mealie-meal price

Minister Tendai Biti announced in his Mid-Term Fiscal Policy Review Statement in July that import duty on selected commodities had been restored the price of maize meal increased by US22c.
However, Natfoods said while it expected significant growth in demand for its Red Seal roller meal and Pearlenta refined meal due to the increase in the price of imported mealie-meal the firm had no intention of hiking its prices.
Briefing journalists during a tour of its Harare factory last Friday, managing director for the milling division Mr Chipo Nheta said the decision by Minister Biti to restore import duty will result in increased demand and this could raise capacity utilisation by 15 percent.
Before the reinstatement of duty, Natfoods was operating one mill in Harare, but a second one is now active although they have maintained a single shift.
The Bulawayo operation, which had been closed due to low demand, has reopened and is running two mills with two shifts of eight hours each.
“Natfoods have not increased prices of maize meal before and after duties. If you carry out a market survey you will discover it is a retailers’ decision and has nothing to do with manufacturers,” said Mr Nheta.
The diversified food processor said that it could only consider price adjustment if there was an increase in the international price of maize.
Even after a 31 percent increase in the price of electricity, which is a US$5 000 monthly cost to its operations, it would not be tempted to review prices.
Natfoods also said it was more than capable of meeting increased demand for maize meal despite the fact it has to import 85 percent of the maize from Zambia and Malawi due to shortage of the commodity locally.
Listed on the Zimbabwe Stock Exchange, the firm has capacity to process 60 000 tonnes of maize a month and has storage capacity for 17 000 tonnes. However, the company is currently processing 9 500 tonnes a month.
Mr Nheta said Natfoods had a total of 24 distribution depots across the country’s 10 provinces and would have no problems servicing all of them.
Minister Biti last week threatened to scrap import duty on maize meal, cooking oil, salt, rice and flour if businesses continued with unjustified price hikes.
Some retailers have, however, accused manufacturers of hiking prices and said they were only responding to the price increases by manufacturers.