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

See PODCAST below

In this week’s segment with Agbiz, Sihlobo takes a look at what the impact of an increase in fuel prices in March will be on the South African agricultural sector.

“This past week, the Central Energy Fund's reported that South Africa's petrol (95 ULP inland) and diesel (0,05% wholesale inland) prices would increase by R1,46 cents per litre (c/l) and R1,44 (c/l), respectively, on 2 March 2022.

“This adjustment means the retail price of petrol will rise to a record R21,60 per litre from the current level of R20,14 per litre.

“Simultaneously, the wholesale diesel price will increase to R19,48 per litre from R18,04 in February 2022.

“The underpinning driver of the fuel price increase is the rising Brent crude oil price on the back of the current geopolitics and supply constraints that existed before the intensification of the Russia-Ukraine conflict, amongst other factors,” says Sihlobo.

He further explains that while this fuel price uptick will increase farmers' input costs, it, fortunately, comes at a quiet period in the primary agricultural sector, specifically the summer crop-producing areas where the crops are at reasonably early stages of growth.

“However, the same cannot be said for agribusinesses; those in the logistics business will experience cost increases. This is a busy period of wheat imports and maize exports. At the same time, there are horticulture exports underway.

“This is in addition to general movements of agricultural products in various provinces for domestic consumption. In this case, it is worth noting that roughly 81% of maize, 76% of wheat, and 69% of soybeans in South Africa are transported by road.

“On average, 75% of national grains and oilseeds are transported by road and a substantial share of other agricultural products,” concludes Sihlobo.

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