The South African agricultural sector is approaching yet another busy period. From end-April farmers in the Western Cape and Northern Cape will begin preparing their land for the 2026/27 winter crop season.
Other provinces will begin from May. These are mainly wheat, canola, barley and oat plantings. Also from May, citrus growers will start harvesting, marking the start of the export season for this sector.
In other regions of South Africa the 2025/26 summer grains and oilseed early harvest will start at end-May. This flurry of agricultural activity means it will be a period of high fuel use. Fuel prices increased at the start of this month and further steep hikes are now on the cards.
The path ahead depends mainly on the direction of Brent crude oil prices and the rand’s strength against the dollar. With the ongoing conflict in the Middle East and disruptions to logistics, I fear fuel prices will be higher by the time the busy period in South Africa’s agriculture begins.
There are no clear indications that the conflict in the Middle East will end quickly and the near-term outlook for the sector therefore appears concerning from a production-cost perspective. For the average grain farmer fuel accounts for about 13% of production costs, with the highest use typically occurring during planting and harvesting.
Agribusinesses and agricultural logistics companies are not insulated from these challenges. About 80% of South African grain and oilseeds are transported by road countrywide, from storage to milling and export facilities. The risk of higher fuel prices covers the entire sector.
The pressures on input costs also do not end with fuel. South Africa imports about 80% of its fertiliser and prices typically follow the oil price trend. Therefore, there is a risk of far higher fertiliser prices in the next months.
The commodities with relatively high fertiliser use are mainly grains, oilseeds and sugar cane. For summer grains and oilseeds the season will only start in October. As we are in the midst of the 2025/26 production season the focus will be on fuel usage during the harvest period.
However, after this period fertiliser cost pressures will be the primary focus as the sector heads towards the start of the 2026/27 production season. Fertiliser accounts for a substantial share of grain farmers’ input costs, typically about 35%, and a large share of other value chains’ input costs.
As South Africa’s agricultural sector is export-oriented, higher shipping costs, with disruptions to Middle East trade routes, are another concern. South Africa’s fruit exports generally only gain momentum from May, while grain exports have been slow this year anyway due to ample global supplies.
Meat exports have also been weak, primarily due to the foot-and-mouth disease outbreak in South Africa. The impact of the war in these areas will only be clear in the next weeks and months depending on how long the conflict continues. South Africa’s agricultural sector does not trade much with Iran, but it does trade with other countries in the region, including the UAE, Qatar and Jordan.
The Middle East challenges further underscore the importance of export diversification. Yet, the Middle East conflict should not change the view that this region remains important for future export diversification, with Asia.
As South Africa deepens its engagement in times of peace we will have to ensure that we retain our access to the vital existing markets in other parts of the world.
• Sihlobo is presidential envoy on agriculture and land, chief economist at the Agricultural Business Chamber of South Africa and a senior fellow in Stellenbosch University’s department of agricultural economics.
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