FNB senior economist Koketso Mano states that as the harvesting of summer crops is underway, the recent fuel price cut will enhance farmers’ profitability, as fuel costs represent nearly 13% of input expenses in grain production. Both grades of petrol have decreased by five cents per litre, while diesel prices have dropped by 37 cents per litre at the pumps.
Mano also notes that the citrus export season is in full swing, which will further improve profit margins due to lower transportation costs from farms to ports.
“In the coming months, any recovery in the rand’s value will positively influence fuel prices. This will contribute to reduced transport costs and generally lower inflation in South Africa’s economy, as indicated by the latest inflation figures. However, we must keep in mind that global market volatility is expected to persist, which may affect our outlook,” she added.
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