INPUT PRICE TRENDS UNDER THE MICROSCOPE
Corné Louw, Snr Economist: Inputs, Grain SA
Agricultural Chemicals
Almost 100% of the active ingredients required to manufacture agricultural chemicals are imported to South Africa. International trends and the exchange rate thus play a decisive role in domestic price trends.
Tables 1 and 2 show trends in the prices of international agricultural chemicals (active ingredients). The tables clearly indicate the impact of the exchange rate on domestic prices. The second part of the table indicate international prices in Rand value. The Rand has over a year-period, from February 2016 to February 2017, strengthened with 156.5%.
When looking at insecticide prices, the most active indicate a rising trend in Dollar-terms. But when prices are converted to Rand, all active indicate a lowering trend over a year period, except for Acetamiprid.
Table 1: Pesticide prices: International in Dollar and Rand value
International prices (Dollar/ton) |
|
Feb 2016
|
Feb 2017
|
% change
|
|
$/t
|
$/t
|
|
Acetamiprid (95%)
|
12 906
|
20 724
|
+60.6%
|
Lambda-cyhalothrin (95%)
|
21 130
|
21 831
|
+3.3%
|
Chlorpyrifos (95%)
|
4 192
|
4 851
|
+15.7%
|
Cypermethrin (94%)
|
10 016
|
10 353
|
+3.4%
|
R/$
|
15.790
|
13.190
|
-16.5%
|
|
|
|
|
International prices (Rand/ton)
|
|
Feb 2016
|
Feb 2017
|
% change
|
|
R/t
|
R/t
|
|
Acetamiprid (95%)
|
203 786
|
273 354
|
+34.1%
|
Lambda-cyhalothrin (95%)
|
333 643
|
287 946
|
-13.7%
|
Chlorpyrifos (95%)
|
66 192
|
63 990
|
-3.3%
|
Cypermethrin (94%)
|
158 153
|
136 558
|
-13.7%
|
Where herbicide are concerned, all active ingredients indicate sharp year-on-year declines in Rand-values, except for glyphosate, which indicate an increase of 12.9.
Table 2: Herbicide prices: International in Dollar en Rand value
Internasionale pryse (Dollar/ton) |
|
Feb 2016
|
Feb 2017
|
% change
|
|
$/t
|
$/t
|
|
Glyphosate (95%)
|
3 130
|
4 231
|
+35.2%
|
Acetochlor (92%)
|
2 579
|
2 617
|
+1.5%
|
Atrazine (97%)
|
2 946
|
2 716
|
-7.8%
|
Metolachlor (97%)
|
3 616
|
3 421
|
-5.4%
|
Trifluralin (95%)
|
5 103
|
4 544
|
-11.0%
|
R/$
|
15.79
|
13.19
|
-16.5%
|
|
|
|
|
Internasionale pryse (Rand/ton)
|
|
Feb 2016
|
Feb 2017
|
% change
|
|
R/t
|
R/t
|
|
Glyphosate (95%)
|
49 423
|
55 805
|
+12.9%
|
Acetochlor (92%)
|
40 722
|
34 518
|
-15.2%
|
Atrazine (97%)
|
46 517
|
35 819
|
-23.0%
|
Metolachlor (97%)
|
57 097
|
45 121
|
-21.0%
|
Trifluralin (95%)
|
80 576
|
59 929
|
-25.6%
|
Fertiliser
Since South Africa imports a large quantity of its fertiliser requirements, domestic and international prices should correlate well. Table 3 indicates international prices in Dollar value over a year period, while Table 4 is an indication of said prices in Rand value. From Table 4 it is clear that the strengthening of the exchange rate can play a significant role in the manner which international price decreases, trickle into the local market. International fertiliser prices decreased sharply in Rand value year-on-year, except for Urea with an indicated increase of 0.5%.
Table 5 indicates average domestic fertiliser prices (price list prices). The domestic prices show the same trend as international prices, but it is clear that local prices have not yet fallen to the same extent. It is especially CAN, MAP and Potassium which have not decreased locally to the same extent as the case internationally. Remember that these prices aim to show trends and not necessarily focus on the physical price, since international prices are free on board in international ports and domestic prices are average price list prices.
Table 3: International fertiliser prices
Average international fertiliser prices (Dollar value) |
Fertiliser
|
Feb 2016
|
Feb 2017
|
% change
|
Dollar/ton
|
Dollar/ton
|
%
|
Ammonia (Middle East)
|
316
|
296
|
-6.3%
|
Urea (46) (Eastern Europe)
|
207
|
249
|
+20.3%
|
DAP (USA Golf)
|
366
|
361
|
-1.4%
|
Potassium Chloride (CIS)
|
244
|
216
|
-11.5%
|
Rand/Dollar exchange
|
15.794
|
13.190
|
-16.5%
|
Table 4: International fertiliser prices
Average international fertiliser prices (Rand value) |
Fertiliser
|
Feb 2016
|
Feb 2017
|
% change
|
Rand/ton
|
Rand/ton
|
%
|
Ammonia (Middle East)
|
4 991
|
3 904
|
-21.8%
|
Urea (46) (Eastern Europe)
|
3 269
|
3 284
|
+0.5%
|
DAP (USA Golf)
|
5 781
|
4 762
|
-17.6%
|
Potassium Chloride (CIS)
|
3 854
|
2 849
|
-26.1%
|
Table 5: Local fertiliser prices
Average local fertiliser prices |
Fertiliser
|
March 2016
|
March 2017
|
% change
|
Rand/ton
|
Rand/ton
|
%
|
CAN (28)
|
5 688
|
5 911
|
+3.9%
|
Urea (46)
|
6 208
|
6 280
|
+1.2%
|
MAP
|
9 573
|
8 844
|
-7.6%
|
Potassium Chloride
|
7 462
|
6 547
|
-12.3%
|
Fuel price expectations for April
Fuel price changes for April are providing a possibility for a decrease, however the effect on the consumer will be minimal as they have to deal with the fuel tax increases to the general Fuel- and Road Accident Fund levies of 30 cents and 9 cents per litre (c/l), respectively.
According to the information from the Central Energy Fund, petrol and diesel prices are likely to decline on 05 April 2017. Without taking into account the new levies, it is expected that Petrol (95) could decrease by 63 c/l and diesel (0.05%) by 46 c/l. With the new levies in place, petrol could go down by 24 c/l and diesel by only 7 c/l.
Final fuel price changes will however depend on the performance of the rand and the movements in international product prices.
Back to Top
|