South African farmers are bracing for a tough winter season after rising Middle East tensions in recent weeks caused fertiliser shipments through the Strait of Hormuz to collapse.
Economists expect an ongoing spike in fertiliser and fuel costs to weigh heavily on the local agricultural sector over the next few months, pressuring farmers to raise prices and potentially forcing poor households to cut back on groceries.
Fertiliser accounts for more than a third of farmers’ input costs across the sector. To make matters worse, basic commodities such as grains, oilseeds and sugar cane are most reliant on fertiliser and thus affected disproportionately by price shocks.
Across the sector, South Africa’s reliance on fertiliser imports makes it vulnerable to global price changes, with about 80% of annual fertiliser usage sourced outside the country, mainly from Russia, Oman, China, Germany and Chile. However, about a third of fertiliser ingredients come from the Middle East, particularly Qatar and Saudi Arabia.
“If logistics are interrupted for some time this could soon become a major constraint for global agriculture. We have already seen a surge in fertiliser prices globally,” said Agriculture South Africa (AgriSA) chief economist Wandile Sihlobo.
“The challenge is that fertiliser accounts for a substantial share (typically 35%) of the grain farmers’ input costs and a substantial share of other value chains’ input costs. All this signals that there are more pressures ahead,” he said.
Fertiliser is not the only vehicle through which the war in Iran threatens South Africa’s food supply. The oil price, which has soared more than 44% since the first US-Israeli strikes on February 28, typically accounts for about 13% of grain farmers’ production costs.
The challenge is that fertiliser accounts for a substantial share (typically 35%) of the grain farmers’ input costs and a substantial share of other value chains’ input costs.
— Wandile Sihlobo, AgriSA) chief economist
The highest fuel usage typically occurs during planting and harvesting, according to Sihlobo, but most (about 80%) of South African grain and oilseeds are also transported by road across the country to storage, milling or export facilities.
Meanwhile, Western Cape premier Alan Winde has written to the presidency and office of the minister of mineral & petroleum resources expressing concern over what he said appears to be the hoarding of fuel stock by some suppliers.
He said in a statement at the weekend that his government is aware of isolated incidents where filling stations in parts of the province have run short of fuel or have depleted their stocks and are unable to source diesel in particular.
Organised agricultural bodies have called on the government to consider an out-of-cycle fuel price adjustment to better reflect market conditions and to introduce more regular reviews instead of the standard monthly adjustment for the duration of the present period of energy price volatility.
“Across multiple regions, respondents reported constrained supply and increasing instances of rationing, with retailers limiting volumes due to uncertainty around replenishment. These constraints are beginning to affect normal farming and agribusiness operations at a critical time in the production cycle”, AgriSA and the Agricultural Business Chamber (Agbiz) said in a joint statement.
“AgriSA and Agbiz emphasise that the current situation does not appear to be driven by a single identifiable factor, but rather by a combination of global oil market volatility, supply chain dynamics and behavioural responses within the market. In such conditions, pricing signals play a critical role.”
Mervyn Abrahams, programme co-ordinator at the Pietermaritzburg Economic Justice and Dignity Group, said poor households will be most directly affected by the pressure on food prices. The rising cost of fertiliser, fuel and shipping insurance is already putting pressure on grain farmers as they prepare for the 2026-27 planting season, which typically starts in October, he said.
“Farmers are paying a higher price for whatever they procure now. Even if petrol prices come down in a month or two, this increase is already locked into the system, so we do expect food prices to increase.”
That increase is expected to reverse a gradual decline in food inflation over the past 18 months. “Any impact from the US and Israel’s war in Iran will only drive us deeper into crisis,” Abrahams said.
“Lower-income households, which make up 60% of South Africa’s householders, already don’t have sufficient income to procure sufficient and nutritious food. The food basket we track, which includes very basic foods like rice, maize meal, chicken, onions and bread, stood at R5,383.81 in February. That is already more than the monthly national minimum wage.”
Survival strategies
Abrahams said households’ survival strategies in times of price shocks are simply to eat less or switch to cheaper, less nutritious foods. Either outcome is detrimental to the country’s long-term socioeconomic development as it places a greater burden on healthcare clinics and erodes workers’ productivity.
As war wages on in the Middle East, big JSE-listed agricultural investors aim to shore up and diversify their fertiliser supplies. Omnia, one of South Africa’s largest producers and suppliers of fertiliser with a market cap just shy of R15bn, told Business Day it is closely monitoring the impact of the Middle East conflict on global commodity prices and supply.
“Global fertiliser supply, which is essential for modern agriculture, is becoming more and more vulnerable to knock-on effects from today’s shifting geopolitical landscape,” it said. The group has “already taken extensive measures to ensure uninterrupted supply to customers across all sectors”, including “significant strategic investment” in logistics and storage facilities, while reducing ammonia dependency for the explosives it sells to the local mining sector.
“Many commercial farmers have already placed orders for fertiliser for the upcoming (winter) planting season, with these stocks’ prices unchanged,” Omnia said. “While global supply chains may experience short-term disruption as geopolitical conditions evolve and trade flows adjust, Omnia has already put the necessary plans in place for the Western Cape winter planting season for our customers.”
Omnia shares have gained more than 5% since the beginning of March, extending an 18% rise this year.
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