• Latest
  • Trending
  • All
  • News
  • Lifestyle
Farmers are navigating through a record-high input environment and the outlook on interest rates is worsening. Photos: Supplied/Food For Mzansi

Fuel price, interest rates a double blow to farmers

6th July 2022
Justin Platt, founder and CEO of Zylem and RegenZ argues that instead of basing management decisions on a purely rational and cognitive approach, farmers need to harness (and trust) their unique intuition. Photo: Supply/AdobeStock

Farmers, trust your intuition and go with your gut

15th August 2022
Leanne Gammage and Jackson Andrew, co-founders of Masterstock Cape Wild Food. Masterstock Cape Wild Food is a speciality salt brand focused on regenerative agriculture. Photo: Supplied/Food For Mzansi

Agripreneur 101: Regeneration at the heart of this salt company

15th August 2022
ADVERTISEMENT

R350 grant puts sisters on agri path to success

15th August 2022
The uMngeni Municipality in KwaZulu-Natal is supporting local farmers through a new agricultural unit that has been established in the municipality. Photo: Supplied/Food For Mzansi

Farmer support: KZN municipality leads the way

15th August 2022
Farmers in the south-western parts of the country can expect a slightly drier than usual spring. Photo: Supplied/Food For Mzansi

ICYMI: Below-normal winter rainfall to continue

15th August 2022
This week's Agri calendar features a wine and food event, an online discussion on biofilms the dairy industry and another on cutting fertiliser costs. There's also a livestock auction to look out for and an online event about soil. Include your event to the calendar by emailing info@foodformzansi.com. Photo: Supplied/Food For Mzansi

This week’s agriculture events: 15 to 18 August 2022

15th August 2022
Andile Matukane, founder of Farmers Choice and Devroll Legodi, founder of Devroll Herbs, joined a recent session of Food For Mzansi’s Gather To Grow on twitter o discuss the cultivation of spring onions in Mzansi. Photo: Supplied/Food For Mzansi

Farmer 101: Top tips to grow spring onions

14th August 2022
This drone is collecting data which farmers can then access on the yield management platform. Photo: Supplied/Aerobotics

How the Internet of Things is transforming agri

13th August 2022
His life took a turn for the worst when he ended up in jail for dealing in drugs, but Thembinkosi Matika turned his life around and now helps others through his Legacy Farming Project. Photo: Supplied/Food For Mzansi

Drug dealer turned farmer ploughs back

12th August 2022
Beat the winter blues with yummy butter chicken

Beat the winter blues with yummy butter chicken

12th August 2022
Households in South Africa could be in for some respite in the coming months on food prices. Photo: Supplied/Food For Mzansi

Food may soon be cheaper. What’s the catch?

12th August 2022
Archive photo. Western Cape agri MEC Ivan Meyer highlighted small towns' dependence on agriculture during a recent provincial summit with municipal leaders. Photo: Supplied/Food For Mzansi

ICYMI: MEC lines up municipal support for farmers

12th August 2022
  • Home
  • News
  • Changemakers
  • Lifestyle
  • Farmer’s Inside Track
  • Food for Thought
11 GLOBAL MEDIA AWARDS
Tuesday, August 16, 2022
Food For Mzansi
  • Home
  • News
  • Changemakers
    • All
    • AgriCareers
    • Entrepreneurs
    • Farmers
    • Groundbreakers
    • Innovators
    • Inspiration
    • It Takes a Village
    • Mentors
    • Movers and Shakers
    • Partnerships
    Leanne Gammage and Jackson Andrew, co-founders of Masterstock Cape Wild Food. Masterstock Cape Wild Food is a speciality salt brand focused on regenerative agriculture. Photo: Supplied/Food For Mzansi

    Agripreneur 101: Regeneration at the heart of this salt company

    R350 grant puts sisters on agri path to success

    The uMngeni Municipality in KwaZulu-Natal is supporting local farmers through a new agricultural unit that has been established in the municipality. Photo: Supplied/Food For Mzansi

    Farmer support: KZN municipality leads the way

    This drone is collecting data which farmers can then access on the yield management platform. Photo: Supplied/Aerobotics

    How the Internet of Things is transforming agri

    His life took a turn for the worst when he ended up in jail for dealing in drugs, but Thembinkosi Matika turned his life around and now helps others through his Legacy Farming Project. Photo: Supplied/Food For Mzansi

    Drug dealer turned farmer ploughs back

    Christo Van der Rheede is the executive director of Agri SA. Photo: Supplied/Food For Mzansi

    Former music teacher leads agri’s greatest symphony

    Agripreneur 101: Creating a beauty brand

    Agripreneur 101: Creating a beauty brand

    Claire and Martin Joubert have sacrificed and struggled to become top breeders of Ankole cattle in South Africa. But giving up was never an option, because they wanted to offer only the very best Ankole genetics in the country. Photo: Supplied/Food For Mzansi

    Farming couple lives and breathes Ankole cattle

    Tackling climate change, one tree at a time

  • Lifestyle
  • Farmer’s Inside Track
  • Food for Thought
No Result
View All Result
Food For Mzansi

Fuel price, interest rates a double blow to farmers

Mzansi’s inflation outlook is worsening, says FNB Agri-Business economist Paul Makube. It could be the final blow to farming businesses who are already struggling in an environment of record-high fuel and other input costs

by Staff Reporter
6th July 2022
in News
Reading Time: 3 mins read
A A
Farmers are navigating through a record-high input environment and the outlook on interest rates is worsening. Photos: Supplied/Food For Mzansi

Farmers are navigating through a record-high input environment and the outlook on interest rates is worsening. Photos: Supplied/Food For Mzansi

Record-high input costs and more expensive loan repayments could prove a lethal combination for farming businesses that are already struggling to balance their books. This is according to Paul Makube, senior agricultural economist at FNB Agri-Business, who says that the latest rise in fuel prices comes at a time when South Africa’s outlook on interest rates is also worsening.

Food inflation: Paul Makube, senior agricultural economist at FNB. Photo: Supplied
Paul Makube, senior agricultural economist at FNB Agri-Business. Photo: Supplied/Food For Mzansi

He says several global factors have played into the escalating fuel price. These include the unrelenting crisis on global crude oil trade with the ongoing Russia-Ukraine war, the unrest-induced production challenges in Libya, the rebound in Chinese demand following the lifting of Covid-19 restrictions, as well as Opec’s failure to meet its agreed supply quota.

They all contributed to an increase of 77 US cents in prices since May, which more than offset the 1.2% appreciation in the rand-dollar exchange rate.

ADVERTISEMENT

Consequently, South Africa saw petrol increasing by between R2.37 and R2.57 per litre, effective from today (Wednesday, 6 July 2022), and diesel increasing by between R2.31 and R2.30 per litre.

“This comes at a time when the consumer inflation deteriorated and breached the upper end of the South African Reserve Bank target of 3% to 6% in May 2022, signalling further rate hikes after the 50 basis points increase to 4.75% last month,” Makube says.

Producers hit harder than consumers

Meanwhile, producer prices have accelerated faster than consumer prices, he adds. It reflects the impact of the cost pressures on producers that comes from fuel prices on the one hand and the limited availability of inputs on the other, due to global supply chain bottlenecks.

May’s agriculture producer price index (PPI) increased by 19.3% year on year with sharp increases of 30.8% year on year for cereals and other crops. It rose by 20.8% year on year for the fruit and vegetable subcategories.

“The combination of higher debt serving costs in a record-high input cost environment will continue to erode farmer producer margins and may force those that had already been in a dire financial situation to quit,” Makube says.

He adds that fuel price increases also manifest in the distribution of produce. “Grain producers and logistics companies in the agriculture value chain will feel the pain as closer to 80% of grain is transported by road. Livestock and horticulture with citrus export season currently in full swing will also be affected in terms of distribution across the country and for exports.”

On the consumer front, the latest FNB/BER Consumer Confidence Index (CCI) remained on the downside for the second consecutive quarter, signalling potential contraction in consumer spending in the medium term. Confidence dropped sharply to -25 points following a decrease to -13 index points in the previous quarter.

Makube says reduced spending may dampen demand and subsequently prices for produce, and may add to a further squeeze on producer margins in the near term.

ALSO READ: Caught in a price spiral: Farmers brace for major losses

Sign up for Mzansi Today: Your daily take on the news and happenings from the agriculture value chain.

ADVERTISEMENT
Tags: food inflationFuel PricesICYMIPaul Makube
Previous Post

In pictures: Can this failed farm village be resurrected?

Next Post

Why farmland in Mzansi is not getting cheaper

Staff Reporter

Staff Reporter

Researched and written by our team of writers and editors.

Related Posts

Refiloe Molefe has vowed to build a new urban farm after the City of Johannesburg bulldozed the site she built in Bertrams. Photo: Supplied/GroundUp

ICYMI: Mama Fifi determined to rise again

by GroundUp
9th August 2022
0

In case you missed it: She made headlines when the City of Johannesburg demolished her urban farm. Now Refiloe Molefe...

Many South African businesses are forced to spend money they don’t necessarily have on diesel generators. An expert says, other companies should also enjoy the privilege to earn rebates for spending on diesel and suffering through the blackouts. Photo:Supplied/Food For Mzansi

Fuel rebates should expand to other businesses

by Bernard Mofokeng
5th August 2022
0

Following the unprecedented increase in load shedding, many businesses have to rely on diesel generators regularly. An expert says these...

The Western Cape High Court has ruled in favour of Eric Lolo who went to court to hold the Drakenstein Municipality accountable for emergency housing for people evicted from farms. Photo: Barbara Maregele/GroundUp

ICYMI: High Court victory for former farmworker

by GroundUp
4th August 2022
0

In case you missed it: In a case brought by a former farmworker, the Western Cape High Court told the...

European member countries have approved new shipping rules that might prevent large numbers of South African oranges from reaching European consumers. Photos: Supplied/Food For Mzansi

ICYMI: SA lodges dispute in citrus fiasco

by Staff Reporter
29th July 2022
0

In case you missed it: Hundreds of containers of SA citrus are reportedly being held back in European ports. As...

Next Post
Buying a farm in South Africa is not getting any cheaper. Experts say buyers are more likely to opt for farms in remote areas. Photo: Supplied/Food For Mzansi

Why farmland in Mzansi is not getting cheaper

The uMngeni Municipality in KwaZulu-Natal is supporting local farmers through a new agricultural unit that has been established in the municipality. Photo: Supplied/Food For Mzansi
Farmers

Farmer support: KZN municipality leads the way

by Tiisetso Manoko
15th August 2022
0

Farmers in the rural community of Howick are set to benefit from a first-of-its-kind agricultural unit that has been established...

Read more
Farmers in the south-western parts of the country can expect a slightly drier than usual spring. Photo: Supplied/Food For Mzansi

ICYMI: Below-normal winter rainfall to continue

15th August 2022
This week's Agri calendar features a wine and food event, an online discussion on biofilms the dairy industry and another on cutting fertiliser costs. There's also a livestock auction to look out for and an online event about soil. Include your event to the calendar by emailing info@foodformzansi.com. Photo: Supplied/Food For Mzansi

This week’s agriculture events: 15 to 18 August 2022

15th August 2022
Andile Matukane, founder of Farmers Choice and Devroll Legodi, founder of Devroll Herbs, joined a recent session of Food For Mzansi’s Gather To Grow on twitter o discuss the cultivation of spring onions in Mzansi. Photo: Supplied/Food For Mzansi

Farmer 101: Top tips to grow spring onions

14th August 2022
This drone is collecting data which farmers can then access on the yield management platform. Photo: Supplied/Aerobotics

How the Internet of Things is transforming agri

13th August 2022

Farmer support: KZN municipality leads the way

Beat the winter blues with yummy butter chicken

Fruit farm shows there’s power in transformation

Food may soon be cheaper. What’s the catch?

R350 grant puts sisters on agri path to success

Farmers, trust your intuition and go with your gut

THE NEW FACE OF SOUTH AFRICAN AGRICULTURE

With 12 global awards in the first three years of its existence, Food For Mzansi is much more than an agriculture publication. It is a movement, unashamedly saluting the unsung heroes of South African agriculture. We believe in the power of agriculture to promote nation building and social cohesion by telling stories that are often overlooked by broader society.

Farmers, trust your intuition and go with your gut

Agripreneur 101: Regeneration at the heart of this salt company

R350 grant puts sisters on agri path to success

Farmer support: KZN municipality leads the way

ICYMI: Below-normal winter rainfall to continue

This week’s agriculture events: 15 to 18 August 2022

  • Our Story
  • Contact Us
  • Cookie Policy
  • Privacy Policy
  • Copyright

Contact us
Office: +27 21 879 1824
News: info@foodformzansi.co.za
Advertising: sales@foodformzansi.co.za

No Result
View All Result
  • Home
  • News
  • Changemakers
  • Lifestyle
  • Farmer’s Inside Track
  • Food for Thought

Copyright © 2021 Food for Mzansi

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.