Biggest blow in over 10 years for one of South Africa’s most important farmers
South African farmers will likely plant the smallest area of wheat in more than a decade this year as the war in Iran pushes up the cost of key inputs such as fertiliser and fuel.
Wheat producers plan to plant 486,400 hectares (1.2 million acres) of land in 2026, down 6% from the previous year, South Africa’s Crop Estimate Committee said Thursday in its estimate for intentions to plant winter crops. That will be the smallest area since 2015.
Fuel and fertiliser account for about half of grain farmers’ production costs in the country, and the prices of those inputs, most of which are imported, have surged since the US and Israel began bombing Iran on 28 February.
The wholesale price of diesel in South Africa climbed more than 40% on 1 April, and preliminary data suggest it could go up another 24% next month.
Meanwhile, generic wheat prices on the South African Futures Exchange in Johannesburg have risen 6.9% since the start of the war.
The committee increased its estimate for the 2026 corn production by 2% to 16.8 million tons. That would be the largest crop on record, according to the panel.
Producers of the staple will start harvesting from the end of next month and will also have to absorb the higher diesel price.
The size of the corn crop could mitigate some of the immediate inflationary impact from a smaller wheat harvest.
While consumer-price growth of 3.1% in March was close to the central bank’s 3% target, Governor Lesetja Kganyago has warned of upside risks. Cereal products account for 4% of South Africa’s inflation basket.
Reported by Bonolo Mokonoto for Bloomberg
Loading ...