South African agriculture is facing mounting pressure as the US–Israel and Iran conflict enters its second week, with no clear signs of de-escalation in sight. The effective closure of the Strait of Hormuz has driven oil prices above the $100-per-barrel mark, and as a result, ripple effects are now spreading through fuel-dependent sectors at home – none more directly than farming.
Several major producers, including Kuwait and the United Arab Emirates, have already curtailed output due to storage constraints stemming from the shipping disruption.
This has tightened global supply even further. For South Africa, which remains heavily dependent on imported refined fuel, the consequences are being felt immediately across the rural economy.
Speaking at the Southern Africa Oil and Gas Conference in Cape Town on Monday, 16 March 2026, Minister of Mineral and Petroleum Resources Gwede Mantashe confirmed that disruptions to fuel supply chains have intensified since the conflict began. Moreover, he pointed to ongoing fluctuations in under-recovery on fuel prices – a clear precursor to higher costs at the pump.
Those increases are now widely anticipated from 1 April 2026.
This places the agricultural sector in a particularly vulnerable position, because fuel is far from a marginal expense: it is a core input essential for planting, harvesting, irrigation and transporting produce to market.
In several regions, suppliers have already begun restricting diesel sales in order to safeguard stocks for farmers should the situation deteriorate further.
“While questions remain about potential fuel supply disruptions, the reality is that substantial fuel price increases are increasingly unavoidable. Countries that rely heavily on imports of refined petroleum products remain particularly vulnerable to global market shocks.”
The Department of Mineral and Petroleum Resources (DMPR) has reassured the public that South Africa’s fuel supply remains stable in the short term, with adequate reserves and ongoing engagement with oil companies to maintain availability.
However, the department has noted that prolonged geopolitical tensions are exerting upward pressure on international oil prices, with the continued rise in crude expected to translate into higher pump prices from April 2026.
The consequences are both immediate and structural. Even modest rises erode already tight margins, and the sharp spike now forecast threatens to render some operations unviable. Diesel alone accounts for 12 to 18 per cent of production costs on many farms, so any sustained increase feeds straight into the price of food.
This assessment draws directly from the warnings delivered by Minister of Agriculture John Steenhuisen at the Grain SA Congress on 11 March 2026. There, he highlighted fuel’s significant weight in farm budgets – stating that “Fuel already accounts for roughly 12% to 18% of production costs” – and explained the direct transmission of cost increases through the food supply chain.
For farmers, the implications run deep.
Diesel powers essential operations from fieldwork to getting produce to market.
As a result, price escalation translates almost immediately into higher production expenses. In an industry where margins are frequently narrow, these added burdens can quickly challenge viability.
Mantashe assured delegates that the government is actively engaging with industry players to secure alternative supply channels without drawing on strategic reserves. Nevertheless, he was unequivocal that South Africa’s long-term resilience depends on building domestic production capacity.
“However, as we emphasised during the Africa Gas Forum, the sustainable long-term solution to our challenges lies in domestic production. This can only be achieved through the rigorous exploration and responsible exploitation of our own petroleum resources. As you are aware, one of the biggest challenges facing the development of our petroleum sector remains the persistent opposition from environmental lobby groups who continue to block every oil and gas development initiative in our country,” he said.
He pointed to untapped offshore reserves, including significant gas discoveries in the Outeniqua Basin and emerging potential in the Orange Basin – where recent finds off Namibia may extend into South African waters.
Yet these prospects, he argued, remain largely undeveloped due to environmental opposition, even though the Constitution demands a balance between ecological sustainability and economic development.
“The truth is that rising oil and gas prices have a direct ripple effect on the cost of living. The lack of access to these resources has an even greater impact, as it can lead to energy poverty, rising unemployment, and the further entrenchment of poverty and inequality. South Africa, and indeed the African continent at large, cannot afford to remain poor while endowed with abundant natural resources. We must harness these resources responsibly to drive inclusive economic growth, create employment opportunities, and eradicate poverty,” elaborated the Minister.
While policy debates continue at national level, the effects are already being felt acutely on the ground.
Newcastle farmer Bertus Pretorius told Newcastillian News that the strain is no longer theoretical.
Many farmers are struggling to secure sufficient diesel for essential harvesting and planting activities. Furthermore, a further rise in April would impose severe constraints.
“Grain prices are still very low, and as it is, we are not covering our input costs, and the significant price in fuel prices will be a further nail in the agricultural coffin. The high fuel prices will have a direct impact on future food prices.”
Steenhuisen reminded delegates that South African farmers produce between 10 and 16 million tonnes of maize annually, depending on rainfall, supplying domestic needs and regional exports.
Recent Crop Estimates Committee data for the 2025/26 season forecast maize production at approximately 16.13 million tonnes (down 3% from the previous season but still well above domestic usage of around 12 million tonnes), while wheat production covers only about half of the more than 3,5 million tonnes consumed each year. Consequently, the country remains structurally dependent on imports for 40 to 50 per cent of its requirements.
The projected diesel increase of around R4.40 per litre from 1 April 2026 — with preliminary Central Energy Fund (CEF) mid-March data now indicating potential hikes for 0.005% diesel in the range of R6 to R7.15 per litre, amid escalating oil prices and rand weakness.
This coincides with sharply higher insurance premiums for vessels transiting the Strait of Hormuz, rising from 0.25 per cent to 1 per cent of cargo value, which are already inflating the cost of fertiliser imports from Oman, Qatar and Saudi Arabia.
These pressures arrive at a critical juncture, affecting producers who are either wrapping up summer harvests or gearing up for winter planting. Fertiliser, which accounts for between 35% and 50% of production costs in some grain farming regions according to Department of Agriculture data, faces additional upward pressure from the same shipping disruptions, compounding the diesel cost burden on farmers.
Beyond rising costs, the cash-flow strain is forcing difficult decisions. Maize farmer Hendrik Jacobs described how producers are contemplating retrenchments to manage constrained finances.
“The agricultural sector’s available cash flow is an issue, and in order for us to run our farms efficiently, we will have to look at cutting costs to ensure we can continue growing our product, and unfortunately retrenchmenting staff is one of the steps, as we do not have much choice,” noted Jacobs.
Pretorius and Jacobs both cautioned that consumers will ultimately feel the effects.
With national stocks of staples amounting to roughly a week’s supply at any given time, further disruptions could lead to intermittent shortages of essentials such as milk, meat, fruit and vegetables.
“Due to the rising fuel prices which are expected and the impact the situation in the Middle East is having, we could experience potentially experience intermittent shortages of staples such as milk, meat, fruit and vegetables, as realistically, there is approximately a week’s worth of food available in the country at the moment,” stressed Jacobs.
Taking the above into consideration, Steenhuisen emphasised that farmers do not seek protection from market forces but rather predictability in how those markets function, with him noting that agriculture demands long planning horizons, and unreliable infrastructure or delayed decisions only shorten them.
“What producers consistently tell me when I engage across the country is that they are not asking the government for protection from markets. South African agriculture is one of the most market-oriented agricultural sectors in the world. What farmers are asking for is something far more fundamental: a policy environment in which markets function predictably, infrastructure works efficiently, and government decisions are implemented clearly and consistently,” he said.
Efforts are under way to enhance that predictability, including proposals to automate the wheat import tariff mechanism and to expand biofuels production – measures that could boost demand for maize while reducing dependence on imported energy.
Yet, as Steenhuisen concluded, food security ultimately hinges on farm profitability.
“Ultimately, however, food security rests on farm profitability. If farmers cannot operate viable businesses, the entire food system becomes fragile. Government’s responsibility is therefore to ensure predictable policy, efficient administration, functioning infrastructure and regulatory systems that support competitiveness. When those fundamentals are in place, South African farmers continue doing what they have always done: adapt, innovate and feed this nation.”
South African agriculture stands at a critical juncture amid escalating global energy volatility stemming from the Middle East conflict.
The projected surge in diesel and fertiliser prices—now potentially exceeding initial estimates of R4,40 per litre for diesel, with preliminary Central Energy Fund data pointing to hikes in the R6 to R7,15 range for key grades—intensifies the strain on already narrow margins and constrained cash flows.
Producers face immediate operational challenges, from rationing inputs and curtailing activities to contemplating staff retrenchments, as voiced by farmers such as Bertus Pretorius and Hendrik Jacobs. These cost pressures, if prolonged, threaten to elevate food prices and heighten the risk of intermittent shortages in staples, underscoring the vulnerability of a just-in-time food system reliant on limited domestic buffers.
Restoring farm-level profitability remains paramount, enabling producers to plan confidently across seasons and sustain their role in feeding the nation. Without prompt and coordinated action to mitigate these structural exposures, the broader implications for food security and economic stability could prove enduring and far-reaching.
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