Iran tensions drive up costs for SA farmers
Iran tensions drive up costs for SA farmers
South African farmers are facing rising input costs and growing operational pressure as geopolitical tensions in the Middle East disrupt global energy and shipping markets.
The impact is already filtering through to the agricultural sector, with higher diesel prices, tightening fertiliser supply and increasing strain on export logistics.
“South Africa’s agricultural sector is uniquely exposed to global shocks,” says Sanele Nkosi, Head of Agriculture at BDO South Africa. “Farmers rely heavily on imported inputs such as fertilisers, fuel and machinery, while selling into globally priced markets.”
Since early 2026, instability around key shipping routes near the Strait of Hormuz has pushed up fuel and freight costs, creating a compounding effect across the value chain.
The most immediate pressure has come from diesel. Inland prices rose by 62 cents per litre in March, raising costs across planting, irrigation, harvesting and transport.
“Diesel is the lifeblood of commercial farming,” Nkosi says. “When costs rise, especially alongside currency pressure, the impact compounds quickly.”
South Africa’s dependence on imported fuel, much of it sourced from Gulf countries is amplifying the effect as shipping risks and insurance costs increase.
Fertiliser costs are also climbing at a critical time. South Africa imports most of its fertiliser from countries including Saudi Arabia, Qatar, Oman, Russia and China. Disruptions to shipping routes are driving up prices just as farmers enter a key procurement window ahead of the next planting season.
“Fertiliser can account for up to 50% of input costs in grain production,” Nkosi says. “If supply becomes unstable, farmers may reduce application, switch crops or plant less.”
Any reduction in fertiliser use is likely to affect yields and, in turn, food prices.
Export logistics are coming under similar strain. South Africa’s citrus, wine and fresh produce industries depend on reliable shipping, but delays and rising freight costs are increasing the risk of losses.
“Fresh produce exports rely on timing and reliability,” Nkosi says. “A delay at port can translate directly into financial loss.”
The disruption is particularly significant given that some of South Africa’s fastest-growing export markets are in the Middle East.
Financial pressures are also intensifying. Sanctions, stricter compliance requirements and SA’s grey-list status are complicating trade finance, with banks becoming more cautious and processing times slowing.
Grain producers are most exposed to rising input costs, while export-oriented horticulture faces logistics risks. Irrigated regions are under pressure from higher energy costs.
If disruptions ease within the next few months, costs may stabilise. But prolonged instability could entrench higher input costs, compress margins and force weaker producers out of the market.
South African farmers may be far removed from the conflict, but they are increasingly paying for it.
The impact is already filtering through to the agricultural sector, with higher diesel prices, tightening fertiliser supply and increasing strain on export logistics.
“South Africa’s agricultural sector is uniquely exposed to global shocks,” says Sanele Nkosi, Head of Agriculture at BDO South Africa. “Farmers rely heavily on imported inputs such as fertilisers, fuel and machinery, while selling into globally priced markets.”
Since early 2026, instability around key shipping routes near the Strait of Hormuz has pushed up fuel and freight costs, creating a compounding effect across the value chain.
The most immediate pressure has come from diesel. Inland prices rose by 62 cents per litre in March, raising costs across planting, irrigation, harvesting and transport.
“Diesel is the lifeblood of commercial farming,” Nkosi says. “When costs rise, especially alongside currency pressure, the impact compounds quickly.”
South Africa’s dependence on imported fuel, much of it sourced from Gulf countries is amplifying the effect as shipping risks and insurance costs increase.
Fertiliser costs are also climbing at a critical time. South Africa imports most of its fertiliser from countries including Saudi Arabia, Qatar, Oman, Russia and China. Disruptions to shipping routes are driving up prices just as farmers enter a key procurement window ahead of the next planting season.
“Fertiliser can account for up to 50% of input costs in grain production,” Nkosi says. “If supply becomes unstable, farmers may reduce application, switch crops or plant less.”
Any reduction in fertiliser use is likely to affect yields and, in turn, food prices.
Export logistics are coming under similar strain. South Africa’s citrus, wine and fresh produce industries depend on reliable shipping, but delays and rising freight costs are increasing the risk of losses.
“Fresh produce exports rely on timing and reliability,” Nkosi says. “A delay at port can translate directly into financial loss.”
The disruption is particularly significant given that some of South Africa’s fastest-growing export markets are in the Middle East.
Financial pressures are also intensifying. Sanctions, stricter compliance requirements and SA’s grey-list status are complicating trade finance, with banks becoming more cautious and processing times slowing.
Grain producers are most exposed to rising input costs, while export-oriented horticulture faces logistics risks. Irrigated regions are under pressure from higher energy costs.
If disruptions ease within the next few months, costs may stabilise. But prolonged instability could entrench higher input costs, compress margins and force weaker producers out of the market.
South African farmers may be far removed from the conflict, but they are increasingly paying for it.