South Africa: Record high fuel prices impact agricultural revenues

South Africa's petrol price has breached the R20 per litre level after the announcement of the December 2021 fuel update by the Department of Mineral Resources and Energy. The recent rise in international crude oil prices coupled with the sharp depreciation in the rand exchange rate to R15.85/US$ led to the latest upward revision to the fuel prices.

Alas, this is happening in conjunction with a sharp increase in input costs mainly fertilizer, pesticides, and herbicides, driven by a combination of global supply shortages and the weakening of the rand exchange rate. Increased activity in terms of planting, transportation of production inputs, distribution of produce as in the case of horticulture and livestock, as well as harvesting will attract additional costs which will negatively impact the profit outlook for South African farmers in the year ahead, despite the current strength in commodity prices.


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