A recent decline in fuel prices will benefit South African farmers and agribusinesses. The rising cost of fuel during 2023 dealt a major blow to the agriculture sector, as not only transport costs went up, but farmers depended on fuel to power their generators as there were many cases of load-shedding.
However, after a number of increases in recent months and despite the volatile rand and concerns around shipping routes in the Red Sea, South African fuel prices have dropped. According to the Automobile Association (AA), international oil prices have stabilised as some major shippers resumed passage through the Red Sea following attacks by rebels from Yemen, which had earlier pushed oil prices higher.
Commenting on the decreases in fuel prices, Agbiz chief economist Wandile Sihlobo said the more than R1/ℓ drop in the diesel price, especially, was a positive development: “Although this is a relatively quiet period in the agriculture industry, with most summer crop regions having completed their planting, the decline in the diesel price will still benefit the agribusinesses that transport agricultural products across the country.”
Source: farmersweekly.co.za