Home Impact producer Foskor’s production and fuel prices have affected food production, says Agri SA

Foskor’s production and fuel prices have affected food production, says Agri SA

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AGRI SA said last week that rising input costs in South Africa posed a major challenge to food production in the country, and identified the production of phosphate and phosphoric acid producer Foskor as well as rising prices. fuel prices like problems.

Agri SA executive director Christo van der Rheede said the costs of fertilizers, herbicides, packaging, diesel, electricity and labor, among others, were rising rapidly, making almost impossible for many farmers to produce food in a sustainable way.

For this reason, the Federation of Farmers’ Organizations said it is calling on all stakeholders, including the government, to engage and intervene in order to reduce the costs of critical inputs.

He urged to optimize locally available substitutes to avoid a looming crisis when it comes to sustainable food production and ultimately food security.

Van der Rheede said these alternatives and products were at the country’s gates.

While international fertilizer prices have increased rapidly over the past year, South Africa has one of the world’s largest producers of phosphate and phosphoric acid, Foskor.

However, according to a recent study by the Bureau for Food and Agricultural Policy, South Africa is ranked third among the most expensive countries in terms of the cost of fertilizer for a grain and oilseed producer.

Agri SA called on the Industrial Development Corporation and the Ministry of Trade, Industry and Competition to engage with the agricultural industry and other stakeholders to optimize and ensure that the agricultural industry benefits from a regular and affordable supply of Foskor.

“In addition, in recent years South Africa has become increasingly dependent on imported fertilizers due to Foskor’s inability to sell affordable phosphate in the South African fertilizer market,” he said. said Van der Rheede.

“Currently South Africa imports around 80 percent of the phosphate for fertilizer manufacturers. This has a negative effect on fertilizer prices, which subsequently leads to significant increases in the variable cost of production for farmers. “

Agri SA said that Foskor has some of the best quality phosphate resources in the world and has the capacity to supply phosphate to southern Africa.

However, management and supply challenges were the root cause of the phosphate price increase and delays. This was compounded by frequent shutdowns of Richards Bay manufacturing plants, which had caused supply chain disruptions.

“The combination of increased prices for farmers and disruption of supply endangers food security and has a serious impact on the profitability and sustainability of farmers,” said Van der Rheede.

“This is essential, as several major fertilizer manufacturers in Europe have been forced to cut production due to rising gas prices.”

The price of natural gas used to produce fertilizers has increased dramatically. Recent blackouts and blackouts across China due to coal shortages have also intensified competition between Asia and Europe for securing energy sources.

Agri SA said it also noted that annual fuel inflation has been consistently higher than headline inflation since this year.

Food inflation has risen steadily this year, reaching as high as 5 percent in September. The potential change in fuel prices was of great concern with planting underway for the summer harvest season, he said.

According to the Automobile Association, the current exchange rate and commodity data forecast fuel price hikes of “catastrophic proportions” at the end of this month, with gasoline increasing by 99 cents per liter and diesel. increasing by a staggering 1.42 rand per liter.

“This is really worrying and it will have a disastrous impact on the profitability of many farms,” ​​said Agri SA.

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