WANDILE SIHLOBO: Rising input costs will keep farmers on their toes in months ahead
Fuel, herbicides and fertiliser prices are increasing, and farmers need to prepare for a challenging environment
Amid an abundant harvest, high agricultural commodity prices have been an unexpected windfall for SA farmers, particularly grain and oilseed growers. However, they will have to manage their portfolios well, as input costs have also been rising, especially fuel, herbicides and fertiliser. Such higher costs have the potential to erode these price gains when farmers embark on the 2021/2022 production campaign, which commences in October.
At the end of the first week of July, the Brent crude oil price was up 72% year on year, trading at about $74 per barrel. The oil price has a close correlation with the prices of fertiliser and various other agrochemical inputs, as well as fuel. As such, herbicide prices show similar increases in dollar terms, with glyphosate up 144% year on year in June. Importantly, SA imports all of its agrochemicals consumption. This means it is not only the rise in prices that is a concern but also the logistics of landing the inputs on the back of disrupti...
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