KEEP UP TO DATE WITH ALL THE IMPORTANT COVID-19 INFORMATIONCOVID-19 RESOURCE PORTAL

FANews
FANews
RELATED CATEGORIES
Category Economy
SUB CATEGORIES General |  Budget 2017 |  Budget 2018 |  Budget 2019 |  Budget 2020 | 

Fuel price drop, a boost in time for planting in just over a week’s time

07 October 2020 Paul Makube, Senior Agricultural Economist at FNB

In just over a week’s time, the planting of summer crops particularly maize begins in the eastern producing areas of the country. The weather outlook is quite positive with a La Nina in the offing, a pattern characterised by above-normal rainfall for the Southern Africa region.

Moreover, commodity prices are currently strong with maize above R3200/ ton and almost 34% higher year-on-year (y/y) and interest rates are at record lows.

The drop in fuel prices comes at the right time and coupled with the above-mentioned factors will afford farmers an opportunity to expand their operations in the 2020/21 crop season. South Africa’s total summer grain and oilseed planted area for the 2019/20 crop season was 2.91 million hectares and this is likely to increase for the 2020/21 season.

Citing a decrease 8.8% in international crude oil prices and the 3.2% strengthening of the rand exchange rate from the previous month, the Department of Energy made a downward adjustment to fuel prices. The 95 ULP and LRP both declined by 23 cents per litre (c/l) at R14.66/l (Inland) and R14.06/l (Coastal), while both the 95 ULP and LRP dropped by 32 c/l at R14.86/l (Inland) and R14.16/l (Coastal) from the 7th of October 2020. The 0.05% and 0.005% sulphur content diesel grades decreased by 90 c/l and 93 c/l respectively to R12.38/l and R12.39/l.

With agriculture activity likely to increase in the near term, the decrease will help reduce cost of operations across the value chains that manifest differently from planting, harvesting, distribution and packaging. Grain producers and logistics companies in the agriculture value chain will benefit, for example, over 80% of grain is transported by road. Hopefully, these benefits would trickle down to the consumer in the current tough economic environment through limiting the upswing in inflation.

 

Quick Polls

QUESTION

Which of the following business models do you favour to achieve a sustainable succession outcome in your financial advice practice?

ANSWER

[a] I will find an independent financial planner to buy my business
[b] I will sell a portion of my advice practice to a large corporate
[c] I will join a large firm and give up my independence
[d] I will invite another independent financial planner to join me
[e] I will partner with a large firm
fanews magazine
FAnews November 2020 Get the latest issue of FAnews

This month's headlines

Customer experience in the ‘now’ generation
Is our industry a tainted industry?
How to keep brokers out of the firing line
Getting to grips with contractual versus delictual liability
International trusts and tax consequences
The COVID-19 pandemic and medical schemes
Subscribe now