Iran war putting South Africa harvests in jeopardy

South African farmer, Derek Mathews, watches an old petrol pump filling a tractor with diesel on his 1,700 hectare farm, wondering where he can find more fuel supplies and afford rising prices days before harvesting starts.

Mathews, 64, is among thousands of farmers in Africa's most advanced agricultural sector struggling with a double price blow - fuel and fertilizer costs have shot up as the U.S-Israeli war against Iran continues into a second month, stifling key energy transit routes like the Strait of Hormuz and upending global energy markets amid higher crude oil prices.

Farmers across South Africa complain that fuel stocks are becoming difficult to source, as suppliers grapple with higher demand, logistics constraints and hoarding of unregulated diesel.

Fuel industry executives and government officials said a spike in buying ahead of new fuel increases from April 1 has disrupted supplies in isolated cases, assuring farmers that fuel stocks are sufficient to cover April.

Fuel was ordered three weeks ago when the price was 18 rand a litre, but the supplier still hadn't delivered by the end of March, Mathews said.

Prices have since risen to 24 rands a litre at the highly-mechanised farm where maize, sunflower, dry beans and peanuts grow.

"If fuel prices remain at these elevated levels, with already depleted profit margins it doesn't make any financial sense at all to grow maize," he said of a staple South Africa food.

Johann Kotze, chief executive officer at AgriSA, said dealing with uncertainty was a major issue as social media disinformation helped spur panic fuel buying.

“Remember, if you have a shortage of diesel or your fuel prices is going up, that's 20% of the average farmer in South Africa's cost in farming," Kotze said.

A recent March survey by AgriSA found that just under half of farmers who responded couldn't get diesel, while others able to get fuel were limited to between 50 and 500 litres.

-Thando Hlophe, Sisipho Skweyiya/Reuters