Grain SA urges action to shield farmers from rising input costs
Rising diesel and fertiliser prices threaten South Africa’s grain producers as global energy markets remain volatile.
SOUTH AFRICA – Grain SA has warned that South Africa’s grain and oilseed producers face increasing pressure from surging diesel and fertiliser costs as global energy markets react to ongoing conflict in the Middle East.
Brent crude prices have jumped sharply, driving up international diesel and fertiliser prices, which flow directly to domestic production expenses.
Diesel accounts for 13% to 15% of a grain producer’s variable costs, while fertiliser, mostly imported, makes up 30% to 50% of variable expenses. The heavy reliance on imported inputs leaves the sector exposed to international price swings.
Grain SA has written to the Department of Mineral Resources and Energy, the National Treasury, and the Fertiliser Association of South Africa (FERTASA) warning that diesel prices could exceed R8 per litre ($0.47 USD/litre) in the next regulated adjustment.
“As South Africa prepares for winter cereal planting and summer crop harvesting, the combined effects of rising diesel and fertiliser prices present one of the most significant cost shocks to producers in recent years,” said Grain SA Chairperson Richard Krige. “Without temporary relief and responsible behaviour from all players in the value chain, the impact on farmer viability and food security could be severe.”
Grain SA also raised concerns over reports of fertiliser companies increasing prices based on global events despite holding stocks bought at lower rates. “Global crises should not be used as a pretext for unnecessary price increases in South Africa,” said CEO Dr. Tobias Doyer.
“We are calling on fertiliser companies, fuel suppliers, and government partners to work with us to stabilise the sector. Farmers cannot absorb unlimited input-cost shocks, and South Africa cannot afford disruptions in food production.”
Ensuring diesel supplies and short-term relief
To maintain uninterrupted planting and harvesting, Grain SA is engaging diesel suppliers to secure adequate allocation. The organisation also proposed temporary tax relief and enhancements to diesel rebates to ease immediate financial pressure.
“At a time when margins are already under pressure, the sustainability of grain production depends not only on global conditions but on how effectively domestic stakeholders respond,” Doyer added.
Recent developments in wheat tariffs could further affect local production. South Africa recently reduced the floating import tariff on wheat from US$36 per ton to around US$9 per ton, following rising global wheat prices.
Johan Willemse, an independent agricultural economist, noted that while imports may slow, local farmers in the Western Cape struggle to break even at wheat prices around US$350–US$360 per ton. Rising fertiliser costs may push global wheat prices up 30%–40% in the coming months, adding another layer of uncertainty for producers.
Grain SA urges immediate, coordinated action from all stakeholders to prevent further cost pressures and protect the agricultural sector.
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