I know our minds remain focused on the current 2024-25 summer grains and oilseeds season, whose harvest is underway across the country, and is occurring much later than usual by more than a month due to the excessive and prolonged rainy season.
However, I noticed this morning an interesting piece by World Bank economists reflecting on the outlook for global agriculture, and one of the points they raise is their concern about input costs going into 2026. Amongst other things, the World Bank’s analysts argue that:
“Fertiliser prices continued to rise in the second quarter of 2025, with the World Bank’s fertiliser price index up 15 per cent since the start of the year. Triple superphosphate (TSP) and diammonium phosphate (DAP) saw particularly sharp gains, rising 43 and 23 per cent, respectively. The increase has been driven by strong demand, trade restrictions, and production shortfalls, especially in the case of urea. For the full year, prices are projected to register a modest increase over 2024, supported by firm demand, before stabilising in 2026.”
These recent increases were also felt in the winter crop-growing regions of South Africa, as the season began in May 2025. For the summer crop, the input costs were slightly lower.
Still, it remains true that the high fertiliser prices we complain about today are far below the elevated levels seen in 2022-23, following the Russia-Ukraine war, COVID-19-related supply chain challenges, and restrictions on China’s exports.
With that said, the current levels remain significantly above the pre-COVID-19 levels, indicating that farmers continue to face elevated input costs.
You see, South Africa imports roughly 80% of its annual fertiliser requirements, and therefore, these global fertiliser price dynamics matter significantly. Moreover, the major users of the imported fertiliser are field crop farmers, including those of grains, oilseeds, and sugarcane.
The fertiliser also accounts for quite a significant share of their input costs. Consider a grain farmer in the Free State province of South Africa; roughly 35% of their input costs are fertiliser, and they are exposed to all these global developments in the fertiliser market.
Our next summer crop season will not begin until October 2025, but farmers will start receiving all necessary inputs in the coming months. Hopefully, there won’t be any disruptive events in the global energy and fertiliser markets that may increase their input costs.
Another critical variable at this time is the domestic currency, which has remained relatively strong in recent months, potentially easing these input cost pressures somewhat.
Still, the key point emerging from the current data is that we may start the 2025-26 production season with slightly higher input costs than the previous one.
The comforting point about the upcoming 2025-26 season is that the weather conditions outlook remains encouraging. We may not have another La Nina rainy season, but the forecasts suggest that a regular season of favourable rains may be on our way. Still, it is too early to know for sure; we have about two more months to go before we turn our attention fully to the new season.
However, I thought it was essential for us to start considering the input costs for the upcoming season, which may be slightly higher than those of the last season.
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