Consumers will also feel the impact of the Middle Eastern conflict, which is expected to erode spending power, according to the Absa AgriTrends 2026 Autumn Edition, released on Tuesday.
Speaking at the launch event in Johannesburg, Gauteng, Loffie Brandt, executive head of agribusiness at Absa Group, said the most immediate impact of the conflict in the Middle East on South African agriculture stems from rising cost pressures.
“Urea has reached its highest level in several years, trading above US$650/t [around R10 600/t] by early April. Additional adjustments are also expected across other fertiliser categories,” he said.
Brandt warned that producers who have not already secured fertiliser stocks will face higher costs and tighter supply as global supply chains remain strained.
“With petrol and diesel prices climbing by around 15% and 40% per litre, respectively, month-on-month in April, producers entering planting or harvesting season will face cost pressures, as diesel consumption typically peaks during these times.
“Rising fuel prices also carry wider inflationary effects across the economy and may delay anticipated interest rate cuts.”
He noted that logistical disruptions materially elevated the cost and risk profile for South African exporters, who face higher freight costs driven by elevated bunker fuel surcharges, doubled surcharges on some routes, and restricted vessel availability.
In 2025, around 8% of South Africa’s total agricultural exports were destined for the Middle East, with a notable share directed towards Gulf economies currently affected by the conflict. This included 19% of citrus exports, 19% of stone fruit, 12% of apples, 21% of pears, and 4,1% of table grapes.
The report stated that pome fruit exports face the most acute vulnerability, as the season is already under way and consignments have largely been committed, limiting exporters’ short‑term ability to adjust market strategies.
The citrus industry represents a secondary, albeit growing, source of exposure. Although the season has only recently commenced, its early phase remains sensitive to logistical disruptions and cost developments that could influence export performance over the remainder of the season.
Longer transit times also raise the risk of fruit arriving in poor condition, potentially missing optimal market windows. At the same time, diversions to alternative markets could result in reduced revenue for producers.
Opportunities prevail, despite uncertainty
Brandt said that the local agriculture sector has demonstrated resilience and an ability to adapt to changing market conditions in an agile manner over the years and that, despite current challenges, there are also opportunities.
“The current outlook for citrus exporters is favourable. EU markets in particular look promising and, for oranges specifically, duty-free access to the US and tightening Northern Hemisphere supply is expected to contribute to a favourable pricing environment.”
While apple and pear harvesting is currently in full swing, Brandt said apples can be stored for four to six months and pears for two to four months, which allows producers to delay exports in search of more favourable market conditions.
The weakening of the rand since the start of the conflict bodes well for export-orientated industries, although total gains remain limited. Absa expects the rand to give up some of its recent gains over the coming quarters and, amid rising oil prices, advises farmers to consider taking advantage of lower foreign exchange hedge costs to lock in greater certainty.
It expects the rand to weaken to around R17/US$1 by mid-year and R17,30/US$1 by the end of the year.
Conflict brings regressive tax for consumers
For South African households, one of the most immediate impacts of the Middle Eastern conflict is rising fuel and food prices.
Brandt said higher oil and diesel prices have a ripple effect across the food supply chain, as they increase operational costs for farm machinery, fertiliser production, transport, and cold storage, ultimately feeding through to prices on supermarket shelves.
“For consumers, this means a steady erosion of purchasing power as the cost of staples climbs. The burden will fall most heavily on lower‑income households, which already spend a sizeable portion of their income on food, forcing difficult trade‑offs such as reducing protein intake or cutting back on other essentials,” he explained.
“In effect, the conflict risks turning food inflation into a regressive tax on the most vulnerable, adding to cost-of-living pressures even if broader inflation eventually stabilises.”
