He also provides more information about the latest developments in the agricultural sector. 

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In this week’s insert, Sihlobo takes a look at rising input costs that farmers will be experiencing in the new planting season.

“The planting season for South Africa’s 2021/22 summer grains and oilseeds begins in October. While the weather outlook is favourable with prospects of a weak La Niña, which should bring above-normal rainfall, there are concerns about the rising input costs.

“We have recently written about the fertilizers' and agrochemicals' prices, which are over 30% higher compared to levels seen in 2020.  The additional costs to farmers and agribusinesses are the higher fuel prices,” says Sihlobo.

He adds that according to preliminary estimates from the Central Energy Fund, on 1 September petrol (95 ULP Inland) and diesel (0.05% Wholesale Inland) prices could decrease by 5 cents per litre (c/l) and 22 c/l respectively.

“This adjustment means the retail price of petrol could marginally fall to R18,25 per litre from the current level of R18,30 per litre. Simultaneously, the wholesale diesel price could decline to R15,42 per litre from R15,64 per litre in September 2021.

These will still be relatively higher levels. The key factors sustaining fuel prices at these higher levels are the relatively weaker ZAR/USD exchange rate, combined with the rising Brent crude prices, which averaged US$70,09 per barrel in the first 20 days of August 2021, up 55% year-on-year,” concludes Sihlobo.

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