South Africa’s agricultural sector is entering a period of heightened uncertainty, as geopolitical tensions in the Middle East begin to ripple through global input markets, raising concerns about food price stability in 2026.
According to Wandile Sihlobo, chief economist at the Agricultural Business Chamber of South Africa, the sector had initially started the year on a positive note. Improved vaccination efforts against animal diseases, favourable rainfall, and expectations of strong crop production had pointed toward a more stable food inflation outlook.
However, that optimism is now being challenged by rising fuel and fertiliser costs—factors largely driven by ongoing instability in the Middle East.
Global Pressures Begin to Weigh on Local Agriculture
Sihlobo notes that the current uncertainty is not rooted in domestic conditions, but rather in global market disruptions. The Middle East plays a critical role in energy and fertiliser supply chains, and any escalation in conflict has immediate implications for production costs worldwide.
As fuel and fertiliser prices rise, both farmers and consumers are feeling the strain. Producers are facing higher input costs at a time when commodity prices remain relatively subdued, while consumers are already navigating a challenging economic environment.
There are also concerns about potential premature price increases within the market. Sihlobo cautions against such behaviour, emphasizing that unnecessary price hikes would further burden households already under pressure.
Fertiliser Costs Pose a Key Risk Ahead of Planting Season
Fertiliser remains one of the most significant cost components in agriculture, accounting for approximately 35% of grain farmers’ input expenses. With the next planting season for summer crops beginning around October 2026, the trajectory of fertiliser prices in the coming months will be critical.
If supply chains stabilise before mid-year, cost pressures could ease, allowing farmers to enter the next production cycle with more manageable expenses. However, prolonged disruptions could significantly increase production costs, placing additional strain on the sector.
Importantly, Sihlobo highlights that farmers are generally price takers, meaning they cannot directly pass increased input costs on to consumers. Instead, any adjustment tends to occur indirectly, often through changes in planting decisions or reduced output over time.
Fuel Prices Add Further Pressure Across the Value Chain
Beyond fertilisers, rising fuel costs present another major challenge. Fuel plays a vital role across the entire agricultural value chain—from land preparation and harvesting to transportation and distribution.
In South Africa, where approximately 80% of grain is transported by road, higher fuel prices can quickly translate into increased food costs. While supply levels remain generally stable, short-term disruptions and increased demand ahead of price adjustments have already been reported in some areas.
Sihlobo notes that maintaining normal purchasing patterns could help stabilise supply and avoid unnecessary volatility in the market.
Food Inflation Outlook Remains Uncertain
Despite these challenges, there is still potential for food price inflation to moderate in 2026, supported by ample supplies of grains, oilseeds, fruits, and vegetables. However, this outlook is increasingly dependent on external factors—particularly the trajectory of fuel prices.
If global energy costs continue to rise, they could offset the benefits of strong agricultural production, pushing food prices higher than initially expected.
Sanele Nkosi, head of agriculture at BDO South Africa, reinforces this view, warning that rising input costs and logistical disruptions could reduce yields, compress margins, and increase price pressures across the sector.
A Sector Exposed to Global Shocks
South Africa’s agricultural system remains highly exposed to global market dynamics. The country relies heavily on imported fuel, fertilisers, and agricultural machinery, while simultaneously competing in globally priced commodity markets.
This dual exposure means that external shocks—such as geopolitical conflicts—can quickly translate into domestic economic pressures.
As tensions in the Middle East persist, the outlook for South Africa’s agriculture sector will depend not only on local conditions but increasingly on global developments. For now, the sector remains resilient, but the coming months will be critical in determining whether rising input costs evolve into broader food price challenges.