The latest Absa AgriTrends report for Autumn 2025 shines a spotlight on the impact of input costs and adverse weather challenges faced by vegetable producers. Focusing on dynamics in diesel prices, the reports suggests that production costs can trend lower in 2025.
“Over the past three years, the significant surge in fertiliser prices in 2022, following the Russia-Ukraine conflict has had lasting effects, driving up local production costs and squeezing margins,” says the report, highlighting the difficult decisions farmers face as they navigate fluctuating input prices and market dynamics.
The report notes that oil prices are a key fundamental factor to consider in terms of agricultural input costs, as it affects a range of input cost lines such as diesel, fertiliser, and potentially also electricity costs (through the use of generators, although this is less prevalent due to improved energy availability from Eskom).
Oil prices are expected to remain subdued over the coming years due to sufficient supply and spare capacity within OPEC+. Subdued global economic activity due to increased protectionist trends around the globe could also dampen global growth that will likely weigh on demand.
Click here to download the Autumn 2025 edition of the Absa AgriTrends report for free.
A look at the 2024 onion season
The 2024 onion season was marked by firm supply, which pressured prices throughout much of the year. Following favourable market conditions in 2023, many producers increased onion plantings, only to face a situation where supply outpaced demand.
“Onions remain one of the few vegetable categories with notable export volumes; however, the 2024 season did not present a favorable export market,” AgriTrends explains.
This was primarily due to import bans from key markets like Namibia and Botswana, which limited export opportunities. Additionally, political tensions in Mozambique further complicated the situation.
Despite these challenges, the outlook for 2025 is more optimistic. The report anticipates that onion prices will recover, although not to the record levels seen in 2023.
“We expect onion prices to recover in the 2025 season, though not to 2023 levels,” it states, pointing to a rebound in export volumes, especially following Botswana’s easing of its import bans.
Potatoes and climate change
The potato sector also faced significant challenges in 2024, exacerbated by unpredictable weather patterns. The report notes that severe drought conditions in the Eastern and Western Free State during the first quarter disrupted critical growth stages, leading to lower supply levels.
A subsequent black frost event in Limpopo in the second half of the year raised concerns over potato yields. “This shock triggered nationwide fears of potato shortages and significantly higher prices during Limpopo’s peak harvest period,” the report explains.
While the anticipated potato shortages were largely avoided, the report points out that total output in 2024 declined by 3.08%. The resultant lower supply contributed to a surge in prices, which peaked at R10 066 per tonne in October 2024.
Looking ahead, Absa’s forecast suggests that potato production will see slight increases in hectarage in response to the higher prices of 2024.
For the 2025 season, Absa expects marginally lower production expenses compared to 2024. The reduction in diesel and fertiliser costs will help ease the financial burden on vegetable producers, though higher electricity tariffs could still affect profitability.
“Production expenses in 2025 are expected to be marginally lower than in 2024,” AgriTrends concludes, indicating a more stable but still challenging environment for South Africa’s vegetable producers.
