The price rise of inland diesel – from R11,42/ℓ to R12,12/ℓ since the beginning of 2017 – has had a cumulative effect on production input costs that has affected the profitability and sustainability of most SA farmers.
This is the view of TAU SA in response to news that the price of diesel could increase yet further in November 2017, rising 2% above that of October.
Wandile Sihlobo, Agbiz’s head of agribusiness research, reported recently that the inland wholesale price of 0,05% sulphur content diesel could increase by 21c/ℓ to R12,33/ℓ on 1 November.
This would be the fourth consecutive monthly increase in South Africa’s fuel price.
Corné Louw, senior economist on production inputs at Grain SA, said that, by comparison, South Africa’s diesel price in November last year had been R11,35/litre.
“As fuel constitutes more or less 10% of a grain and oilseed producer’s variable production costs, any increase will have an impact,” he said.
He added that Western Cape farmers were currently harvesting their winter grains while summer grain farmers elsewhere in the country were planting for the 2017/2018 production season. South Africa’s agricultural diesel usage was therefore currently high.