South African farmers may face slightly higher input costs when the 2025/26 production season begins, as global fertiliser prices continue their upward trajectory, warns Wandile Sihlobo, Chief Economist of the Agricultural Business Chamber of South Africa (Agbiz).
By Maile Matsimela
“I know our minds remain focused on the current 2024-25 summer grains and oilseeds season, whose harvest is under way across the country, and is occurring much later than usual – by more than a month – due to the excessive and prolonged rainy season,” says Sihlobo. However, he notes that recent analysis from World Bank economists has raised concerns about input costs heading into 2026.
The World Bank’s Fertilizer Price Index has shown a significant 15% increase since the start of 2025, with particular pressure on key products used by South African farmers. “Triple superphosphate and diammonium phosphate saw particularly sharp gains, rising 43 and 23%, respectively,” Sihlobo explains, citing the World Bank’s findings.
According to Sihlobo, these price increases stem from a combination of factors affecting global markets. “The increase has been driven by strong demand, trade restrictions and production shortfalls, especially in the case of urea,” he notes, adding that although prices are projected to register a modest increase over 2024, they are expected to stabilise in 2026.
Pressure On Local Producers
The impact of these global trends is particularly significant for South African agriculture, given the country’s heavy reliance on imported fertilisers. “South Africa imports roughly 80% of its annual fertiliser requirements, and therefore these global fertiliser price dynamics matter significantly,” says Sihlobo.
Field crop farmers, including those producing grains, oilseeds and sugarcane, are among the major users of imported fertiliser and will bear the brunt of these price increases. Sihlobo illustrates the magnitude of this challenge with a practical example: “Consider a grain farmer in the Free State province of South Africa; roughly 35% of their input costs are fertiliser, and they are exposed to all these global developments in the fertiliser market.”
Despite these concerns, Sihlobo provides some historical context to temper alarm. “These recent increases were also felt in the winter crop-growing regions of South Africa when the season began in May 2025. For the summer crop, the input costs were slightly lower,” he observes.
He is quick to point out that current fertiliser prices, although challenging, remain well below the crisis levels experienced in recent years. “It remains true that the high fertiliser prices we complain about today are far below the elevated levels seen in 2022-23, following the Russia-Ukraine war, Covid-19-related supply chain challenges and restrictions on China’s exports,” Sihlobo notes.
However, he acknowledges that farmers continue to face sustained pressure from input costs. “With that said, the current levels remain significantly above the pre-Covid-19 levels, indicating that farmers continue to face elevated input costs,” he explains.
Looking ahead to the upcoming production season, which begins in October 2025, Sihlobo notes that farmers will start receiving necessary inputs in the coming months. “Hopefully, there won’t be any disruptive events in the global energy and fertiliser markets that may increase their input costs,” he says cautiously.
One factor that may provide some relief is the domestic currency’s performance. “Another critical variable at this time is the domestic currency, which has remained relatively strong in recent months, potentially easing these input cost pressures somewhat,” Sihlobo observes.
Despite these challenges, there are reasons for optimism about the upcoming season. “The comforting point about the upcoming 2025/26 season is that the outlook for weather conditions remains encouraging,” Sihlobo notes. Although acknowledging uncertainty, he adds: “We may not have another La Niña rainy season, but the forecasts suggest that a regular season of favourable rains may be on the way.”
Sihlobo admits that weather predictions remain tentative at this stage. “Still, it is too early to know for sure; we have about two more months to go before we turn our attention fully to the new season,” he says.
Nevertheless, he believes it’s important for the agricultural sector to begin preparing for the reality of higher costs. “However, I thought it was essential for us to start considering the input costs for the upcoming season, which may be slightly higher than those of the last season,” Sihlobo concludes.
