Grain SA said the ongoing Middle East conflict is driving volatility in global energy markets, with Brent crude oil prices rising sharply in recent weeks. The knock-on effect is already pushing up diesel and fertiliser costs, placing growing pressure on South Africa’s grain and oilseed producers.
According to Grain SA, diesel makes up between 13% and 15% of a grain and oilseed producer’s variable production costs, and South Africa imports a significant share of its domestic diesel requirements. This leaves the agricultural sector highly vulnerable to global price shocks.
Fertiliser, of which more than 80% is imported, accounts for 30% to 50% of producers’ variable production costs, meaning rising energy prices place farmers under compounded cost pressure.
Pressure on consumers, transport operators, farmers
“Grain SA has, in recent correspondence to the department of mineral resources and energy and the National Treasury cautioned that current trends could result in a substantial increase in the next regulated diesel price adjustment, exceeding R8 per litre, a development that would place additional financial pressure on consumers, transport operators and key sectors of the economy with the impact particularly severe for the agricultural sector,” the organisation stated.
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The chairperson of Grain SA, Richard Krige, expressed deep concern about the pressure producers are facing, describing it as “one of the most significant cost shocks in recent years”.
“As South Africa prepares for winter cereal planting and the harvesting of summer crops, the combined effects of rising diesel and fertiliser prices present one of the most significant cost shocks to producers in recent years. Without temporary relief and responsible behaviour from all players in the value chain, the impact on farmer viability and therefore food security could be severe,” he said.
Higher input costs disrupt food production
Krige’s comments echo concerns raised in Grain SA’s formal submissions to government, which note that fuel constitutes around 14% of total production costs in primary farming and that energy‑driven increases directly influence fertiliser prices, further amplifying cost pressures across the grain value chain and creating an adverse impact for grain and oilseed producers.
Grain SA has also written to the Fertiliser Association of South Africa (Fertasa) after receiving reports that some fertiliser companies may be increasing prices based on global events, despite holding stock procured at lower pre‑conflict prices.
The organisation urged suppliers to avoid opportunistic or unjustified price increases during this critical period for winter cereal producers, particularly in the Western Cape.
The chief executive officer of Grain SA, Dr Tobias Doyer, emphasised the importance of industry‑wide responsibility.
“Global crises should not be used as a pretext for unnecessary price increases in South Africa. We are calling on fertiliser companies, fuel suppliers and government partners to work with us to stabilise the sector during this volatile period.
“Farmers cannot absorb unlimited input‑cost shocks, and South Africa cannot afford disruptions in food production,” he said.
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