As the war in the Middle East pushes up fuel prices, concerns are rising about agricultural costs, profitability and food price inflation.
Steep fuel price rises are in the offing, affecting industry, agriculture and consumers. Food price inflation, which had been moderating, could come under pressure.
Much depends on how long the conflict lasts, said agricultural economist Wandile Sihlobo. If the duration was relatively short, Sihlobo believed his hopes of moderating food price inflation would still be valid. The next big demand period for fertiliser is not until October, when summer crops are planted.
He pointed out that, while farmers would be affected by increased costs for both fuel and fertiliser because of higher oil prices, they would be unable to pass these on to consumers because they are price takers.
“This also means farmers will be under immense strain if the fertiliser prices remain elevated for some time. Fertiliser accounts for 35% of grain farmers’ input costs.”
The latest inflation figures, for February 2026, were compiled before the Iran conflict precipitated a sharp rise in fuel prices. StatsSA showed consumer food price inflation slowed to 3.7% in February, down from around 4% in January.
“In essence, we expect South Africa’s consumer food price inflation to slow in 2026, but fuel prices remain a major upside risk, as they account for a substantial share of the distribution costs of food products,” Sihlobo said.
In a later post, Sihlobo said that, while he had not changed his view that food price inflation was likely to moderate this year, “I am increasingly concerned that prolonged conflict in the Middle East could drive up fuel prices, disrupting my optimistic projection.”
