South African farmers left counting the costs of Iran war ahead of harvest
The government and fuel industry executives have stated that national stocks are sufficient for April
Derek Mathews, a farmer in South Africa’s North West Province, is grappling with a critical dilemma: how to secure and afford vital fuel supplies for the impending harvest on his 1,700-hectare arable farm. His tractor, being filled by an old pump, symbolises a wider struggle.
"It’s terribly expensive to buy fuel at the moment, but the question I need to answer right now is can I get fuel?" the 64-year-old told Reuters, highlighting the dual challenge of soaring costs and dwindling availability.
Farmers in South Africa and globally are facing a significant financial strain, with fuel and fertiliser prices escalating.
This surge is attributed to the US-Israeli war against Iran, which is reportedly stifling key energy transit routes such as the Strait of Hormuz.
Despite assurances from South African government officials and fuel industry executives that national stocks are sufficient for April, farmers report a different reality.
They claim suppliers are struggling to meet higher demand, contending with logistics constraints and instances of diesel hoarding.
Mr Mathews, who acquired 20,000 litres of diesel in February, noted he had only 12,000 litres remaining by 30 March – a mere six days’ worth of fuel as he prepares to harvest his sunflower and maize crops.
A March survey by agricultural body AgriSA corroborated these concerns, revealing that just under half of farmers surveyed faced difficulties in sourcing diesel, with others managing only inadequate purchases of between 50 and 500 litres.
"It's the uncertainty that keeps you awake," AgriSA CEO Johann Kotze said, adding that disinformation about fuel supplies has induced panic buying.
Mathews, who also produces dry beans and peanuts, ordered more diesel in March, by which time the price was 24 rand a litre, but the supplier has yet to deliver it.
Diesel prices are not strictly regulated in South Africa. However, the government said on Tuesday that it will temporarily intervene to cushion sharp fuel hikes by lowering the general fuel levy by 3 rand for April.
In its latest fuel adjustment, the government said that diesel wholesale prices will rise by up to 7.51 rand a litre on 1 April to just under 26 rand, while petrol prices will rise by 3.06 rand a litre.
For now, South Africa has sufficient crop production to keep a lid on food prices.
"South Africa had a favourable agricultural season and has ample supplies that should contain excessive price increases," Wandile Sihlobo, chief economist at Agricultural Business Chamber of South Africa, said during a Citibank client call on 25 March.
Mathews, however, fears that could change if the war in the Middle East leads to a prolonged rise in fuel prices.
"If fuel prices remain at these elevated levels, with already depleted profit margins it doesn't make any financial sense at all to grow maize," he said of a food staple in South Africa.
