OK, folks, this is a data update that I pulled from our Agbiz notes since I think it might interest some people in this space.
The Central Energy Fund’s preliminary estimates suggest that South Africa’s petrol (95 ULP inland) and diesel (0.05% wholesale inland) prices could increase by 57 cents per litre (c/l) and 48 (c/l), respectively, on 03 March 2021. This adjustment means the retail price of petrol could rise to R16,24 per litre from the current level of R15,67 per litre. Simultaneously, the wholesale diesel price could increase to R14,06 per litre from R13,58 per litre in February 2021. This will be the highest level for petrol since December 2019, while for diesel it’s the highest level since March 2020.
The underpinning driver of the price increase is the rising Brent crude price, which on 18 February 2021, traded at US$62,91 per barrel, which is 10% higher than the corresponding period last year.
While this expected fuel price uptick will increase farmers’ input costs, it, fortunately, comes at a quiet period in the agricultural sector. This is except for the agribusinesses in logistics, which will most likely experience an increase in activity due to an expected uptick in wheat imports and summer grains exports.
It is worth noting that roughly 81% of maize, 76% of wheat and 69% of soybeans in South Africa are transported by road. On average, 75% of national grains and oilseeds are transported by road.
Exhibit 1: South Africa’s retail petrol and wholesale diesel prices
Source: Central Energy Fund and Agbiz Research
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