In these times of conversations about the impact of high fuel and fertiliser prices on agriculture, the region of South Africa I find myself thinking about is the Western Cape.
The Western Cape produces much of our winter crops: half of South Africa’s winter wheat and the majority of our barley, canola and oats. Planting begins at the end of April.
Some farmers likely bought their fertiliser before the start of the war in the Middle East and benefited from better prices. But some will have to start planting while fertiliser prices are higher.
As I have said before, fertiliser accounts for 35% of South African grain farmers’ input costs, and fuel accounts for about 13%, meaning roughly half of the input cost component is exposed to the challenges posed by the ongoing conflict in the Middle East.
It is unclear how many farmers managed to secure fuel before the recent hikes. But the point is that South Africa is starting the 2026/2027 winter crop season at a challenging time.
Things would have been better if the previous winter crop had been excellent. But it was not. Farmers across the Western Cape had to replant their crops twice or more. There was a snail infestation that attacked the seedlings.
Spraying and replanting meant farmers incurred higher input costs than normal. What made things worse is that these commodities are traded on the global market, where their prices are determined.
Farmers don’t have the market power to pass costs directly on to consumers and were strained from the previous season. We are now starting this season on the back foot.
We will know how much area farmers intend to plant at the end of this month when the Crop Estimates Committee releases intentions-to-plant data.
As bleak as these views are, from a consumer perspective, there should be no cause for concern in the near term.
The world is awash with wheat, keeping prices under pressure. But the downside for farmers is that it weighs on their profitability in a season when input costs are already higher due to the war.
For example, the International Grains Council forecasts 2025/2026 global wheat production at a record 842Mt, up 5% year on year. This is due to ample harvests in the EU, Russia, the US, Canada, Australia, Argentina, Ukraine and Kazakhstan, among others.
It is partly these ample global supplies and lower global wheat prices that have led to calls to increase the domestic wheat import tariff.
This tariff exists to provide some level of protection for domestic wheat producers while ensuring that consumer welfare is not sacrificed in the process. The key is to find balance. At this time, when farmers are under pressure, we will be thinking more about this at the policy level.
Ultimately, we are entering a stressful season for farmers, but consumers are getting a breather thanks to plentiful global wheat supplies.
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Wandile Sihlobo
www.financialmail.businessday.co.za