Wondering why your food got so expensive? Blame fuel and fertiliser
The price of fuel and fertiliser is to blame for the increasing price of food, not Covid-19, says the Transvaal Agricultural Union of South Africa (TLU SA).
This week's sharp rise in the price of fuel — R1.21 a litre for petrol and R1.48 for diesel — and the record high fertiliser prices put both the consumer and farmer on the back foot.
A recent report by Grain SA sets out the increase in input costs for maize farmers. It is especially the price of fertiliser that has a big influence as it accounts for about 30%-35% of a maize producer's variable production costs, the report states.
Local fertiliser prices are at record high levels for nitrogen (N), phosphate (P) and potassium (K), which especially sharply increased in the past few months.
“The price of seed also increased. According to Grain SA's calculations, maize seed prices for some of the most popular cultivars have increased by an average of 5.6% since last year, while the price of all the maize cultivars has increased by about 3.3%. Sunflower seed prices increased by an average of 3.7%, while soybean seed prices increased by 2.6%.
“According to calculations by Grain SA, the total variable cost of maize is expected to see an average increase of 20%-28% year on year,” said TLU SA.
Potato farmers believe that their input costs will increase by an average of 30%, “which will obviously have an impact on the profitability of the product as well as the price on the market”.
“If the government does not actively intervene and address the Eskom challenge, it is a further influence that will hamper production. Where there is insufficient power supply to irrigate lands, the result is permanent damage to yields and this factor entails further losses,” said TLU SA.