South African consumers may soon face renewed pressure at the supermarket as rising global energy and agricultural input costs threaten to push food prices higher.
According to the latest Absa AgriTrends report, ongoing instability in the Middle East is increasing fuel, fertiliser and logistics costs across the agricultural supply chain, raising the likelihood of food inflation in the near term.
Absa AgriBusiness sector executive Loffie Brandt said the most immediate effect is rising production costs for local farmers.
One of the biggest concerns is fertiliser.
Urea prices have climbed above $650 per ton, reaching their highest level in several years and placing additional strain on producers preparing for planting and harvesting seasons.
Fuel and transport costs likely to feed through to shelves
Fuel prices are also worsening the outlook.
Petrol prices rose by around 15% month-on-month, while diesel jumped by approximately 40% in April, significantly increasing farm operating expenses.
Because diesel powers tractors, harvesters, transport trucks and cold storage logistics, higher fuel costs are expected to ripple through the food value chain.
This includes transport from farms to packhouses, warehouses and eventually supermarket shelves.
Industry analysts say staples such as bread, vegetables, meat and fruit may all face upward pricing pressure if current conditions persist.
Low-income households expected to carry the heaviest burden
The report warns that the impact will be most severe for lower-income households, which already spend a substantial share of disposable income on food.
As grocery prices rise, many households may be forced to make difficult trade-offs, including reducing meat and dairy purchases or cutting back on other essential spending.
Economists say that even if headline inflation stabilises later in the year, food inflation could continue to act as a regressive cost burden on vulnerable consumers.
South Africa’s agricultural sector has historically shown resilience during global shocks, but exporters and domestic producers are now closely monitoring oil markets, shipping routes and currency volatility.
Source: Absa AgriTrends / Food For Mzansi / Agbiz
