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Agriculture Business Chamber CEO John Purchase (L)

John Purchase, CE of the Agriculture Business Chamber, said South African consumers could anticipate increases in soft commodities in the next few months if the spot price of Brent crude oil persisted above the $100 per barrel level.

"The energy prices are a real concern for agri-business from several fronts, including higher production costs within primary agriculture, but also high price pressures for the processors of food. The effects will also reflect in higher transport costs for the bulky services that need transportation," Purchase said.

Ratings agency Moody's also points out that sustained energy prices will reflect negatively on agriculture, among other sectors. Within the food sector, oil prices will further boost costs for feed, fertiliser, equipment and transport in the food protein industry in the US, Asia and Europe, but to different degrees in each region.

Global food prices increased for the eighth consecutive month in February, with prices of all commodity groups monitored rising again, except for sugar, according to the UN Food and Agriculture Organisation food price index. "Fortunately for us, the firmer rand has provided some kind of a buffer in limiting import price pressures until fairly recently. However in recent weeks, we saw food inflation starting to pick up," Purchase said.

Ernst Janovsky, head of Absa AgriBusiness, said producers would not be able to withstand energy prices above $110. "Farmers' profit margins will be squeezed in terms of production costs, as evidenced by the events of 2008, when oil prices shot up to $150 per barrel," he said, adding the knock-on-effect for SA's consumers may be not be immediate, with crops already having being planted.