wilted. Yeah we all know that when such a catastrophe happens, a
drought strikes. This drought has had a devastating effect to farmers
since they used many farming inputs and are now there for struggling
financially.
With the price of fuel and diesel set to go down by at least 65 cents,
farmers will greatly benefit from this.
Dawie Maree, Head of Information and Marketing at FNB Business,
Agriculture, believes that farmers in South Africa have endured a
daunting test due to the drought and it will take a couple of years
before they fully recover.
Okay so logically speaking, fuel and diesel is commonly used for
tillage, harvesting, machinery and transportation. This then makes it
a critical component for both small-scale and commercial farmers, as
well as the entire agricultural value chain.
Given the tough economic environment, subdued growth, coupled with the
possibility of another interest rate hike this year and the imminent
tyre levy, savings on fuel and diesel are bound to have an immediate
impact on the bottom line of farmers.
"Furthermore, lower fuel costs in the long-term would probably result
in lower food inflation, which would benefit consumers, who are also
under significant pressure. However, consumers should expect a delayed
effect as it could take several months before the savings translate to
lower food prices, considering that fuel prices do not increase in the
interim," concludes Maree.
Lower food inflation does keep us all happy in the end. So bravo to
the reduction of fuel prices. Its just what the doctor ordered to make
our 2016 December holidays even more memorable.
