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The debate about rising global inflation and increases in interest rates is hugely relevant for SA’s agriculture and agribusiness sectors. In 2020, when central banks including the SA Reserve Bank lowered interest rates to record lows in response to the Covid-19 pandemic’s economic damage, debt servicing costs were significantly reduced in agriculture. This was a welcome development for a sector that had outstanding debt of R191bn in 2020, according to data from the SA Abstract of Agricultural Statistics.  

However, the rise in interest rates now comes at a tricky time, with input costs such as fertiliser and animal feed elevated and likely to stay at a higher level for some time. The increases are partly the result of the Russia-Ukraine war, which has limited fertiliser production and exports from Russia. Before the war Russia was the world’s leading exporter, accounting for about 14% of global exports...

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