12 December 2016 Read: 851
Much awaited rains over large parts of production land in South Africa has made it possible for farmers to commence with planting for the 2016/17 season.
It is also expected that input costs in the agricultural section are likely to ease in the coming season.
Mr Dawie Maree, head of information and marketing at FNB Business and Agriculture, said while input costs remain elevated when compared to historical trends, there has been some decline which bodes well for the season going forward.
He said fertilizer and fuel remain the major inputs in crop production, particularly grains, and account for approximately 35% and 11% of total variable costs. The prices of these inputs are largely influenced by the international crude oil market.
“The benefits of lower crude oil prices were however offset by the increased volatility in the Rand exchange rate that we continue to experience.”
Maree said other important inputs include herbicides and pesticides, electricity, water tariffs and labour costs. “However, it seems that increases might ease off, except maybe for water tariffs. A moderation in input costs will help revive the sector which is reeling from a devastating drought during the 2015/16 season,” Maree concluded.