Middle East war impact on fuel and fertiliser prices to hit SA consumers, warns economist

Agricultural Economist Wandile Sihlobo has warned about the effects of rising prices of fertiliser and fuel on local farmers due to the ongoing conflict in the Middle East.

About 30% of global fertiliser supplies are transported through the Strait of Hormuz, which has been blocked, prompting increases in shipping costs.

Sihlobo has warned that if the war, now in its third week, is prolonged, it could push up fertiliser prices even higher and trickle down to food prices.

About 80% of the country’s fertiliser supplies are imported. 

FertiliSer makes up approximately 35% of production costs for grain farmers.

Sihlobo said that an increase in fertiliser prices is likely to hit consumers hard, adding that it is compounded by the expected fuel price hike at the start of April following higher Brent Crude Oil prices. 

"Fuel accounts for about 13% of grain farmers' input costs. That’s quite substantive. The issue of a rise in fuel prices is not only just a farmers' concern, but also a concern for folks that are in agribusinesses.

"We must forget that about 80% or so of our grains are transported by road. So, when the fuel prices are increasing that puts pressure. The third aspect that we have to think about is the issue of fertiliser prices."