Fuel price reprieve welcomed by farmers

‘The reduction in the price of diesel that came into effect on 5 May, though small, will bring relief for farmers if sustained over a period of several months.’

So said Kulani Siweya, agricultural economist at Agri SA, in an interview with Farmer’s Weekly.

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He said the price decrease is welcomed, particularly against the backdrop of the general increases in input costs such as the electricity hike and rise in the minimum wage.

‘In the first four months of the year we had already seen (cumulative) increases of close to R3/litre for petrol and R2.32/litre for diesel,’ Siweya said.

The price of 0.05% and the 0.005% sulphur content diesel fell 34 cents and 30 cents respectively, while petrol is now 9 cents cheaper.

Siweya said while the April fuel increase may have been exacerbated by several factors, the rise occurred when agricultural activity was picking up.

These factors included the new general fuel levies coming into effect, as well as the week-long blockade of the Suez Canal.

Another economist specialising in the farming sector, FNB Agri-Business senior economist, Paul Makube, said in a statement that fuel prices had eased for the first time in 2021 on the back of a 2% decrease in international Brent oil prices, and the 3% strengthening of the rand in April against major international currencies, relative to the previous month.

‘Although the fuel price decrease is small, it is most welcome as farmers are busy harvesting summer crops and preparing to plant for the winter,’ said Makube.

He added that, with close to 80% of grain and other crops in SA being transported to milling facilities via road, fuel fluctuations impact both farmers as well as logistics companies, and inevitably the consumer.

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