Falls in fuel prices ‘would aid farmer, consumers’

Picture: Gallo Images/ iStock
Picture: Gallo Images/ iStock

Further fuel price declines will go along way in providing relief to farmers‚ who are still struggling financially due to the effects of South Africa’s most severe drought in decades‚ FNB Business Agriculture information and marketing chief Dawie Maree says.

Central Energy Fund estimates are for the petrol price to fall 47c/ litre and the diesel price 73c/ litre next month.

This follows a 99c/litre drop in the petrol price and a 74c/litre fall in the diesel price in August.

Although lower prices would have a different effect on field crop and livestock farmers‚ depending on how their operations were set up‚ there was potential to lower production costs‚ so lessening strain on cash flow‚ Maree said yesterday.

Lower fuel costs in the long term would probably result in lower food inflation‚ which would benefit already under-pressure consumers‚ he said.

Old Mutual Multi-Managers analysts Dave Mohr and Izak Odendaal echoed this view.

The analysts noted that while South Africa was still battling the worst drought in decades‚ bumper crops in the US and Russia were putting global grain prices under pressure.

“This, together with a stronger rand, means domestic food inflation will probably not rise as much as feared,” they said. – BDlive

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