The expected increase in fuel prices on Wednesday, 3 December, comes at a busy time for agriculture amid the planting of summer crops, such as grain and oilseeds, as well as harvest time for winter grain and oilseeds.
By Nico van Burick, senior journalist at African Farming and Landbouweekblad
The price of diesel (sulphur content 0.05%) is expected to increase by about 61c/litre inland and the price of petrol (95 octane) by 26c/litre. Fuel comprises about 13% of a grain farmer’s production costs.
Wandile Sihlobo, chief economist at the Agricultural Business Chamber of South Africa (Agbiz), says in addition to the setback for farmers, agribusinesses are also exposed to fuel price increases – especially on the logistics side. “Roughly 81% of maize, 76% of wheat and 69% of soybeans in South Africa are transported by road. This means that on average 75% of South Africa’s grain and oilseeds are transported by road and a significant proportion of other agricultural products as well.”
The increase comes after consumers enjoyed some relief over the past two months. In November, there was a reduction of about 33c/litre in the price of diesel and the price of petrol was about 57c/litre lower. This was attributed to a relatively stronger rand against the US dollar, as well as a fairly stable oil price for most of October.
Sihlobo warned at the time that this might be the last good news for a while. In October, there was a 56c/litre reduction in the price of diesel with a sulphur content of 0.05% and the price of petrol (95 octane) was 4c/litre lower.
Also read:
Cheaper fuel in November, but expert warns of bigger problems ahead
‘Overreaching’ fuel bill a threat for farmers, agricultural businesses
