An update on selected items - January 2019 - National Agricultural Marketing Council
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An update on selected items
January 2019
EXECUTIVE SUMMARY
International and domestic price trends for selected fertilisers
From December 2017 to December 2018, the international price (Rand terms) of Urea, Muriate of
Potash (MOP) and Di-Ammonium Phosphate (DAP) increased by 43.6%, 29.4% and 0.2%,
respectively. During the same period the Rand/US Dollar (R/$) exchange rate depreciated by 8.7%.
The domestic prices of Urea, Mono-Ammonium Phosphate (MAP) and Potassium Chloride (KCL)
increased by 15.0%, 5.8% and 5.7%, respectively, from December 2017 to December 2018,
Fuel prices & Illuminated paraffin
From January 2018 to January 2019, the prices of petrol and diesel decreased by 2.8%, and 0.8%
respectively. The price of crude oil (US$ terms) decreased by 16.7%, with 17.0% depreciation of the
Rand.
In January 2019, the price of illuminated paraffin in Gauteng reached R8.82/litre compared to the
Coastal regions’ price of R7.68/litre.
Freight Indices
The Baltic Dry Index (BDI) increased by 27.0% between September 2017 and September 2018. In
September 2018, the BDI was 1 731 index points.
Table of Contents
Page
1. Introduction 1
2. International price trends for selected fertilisers 1
3. Domestic price trends for selected fertilisers 2
4. Fuel prices 2
5. Baltic Dry index 3
6. Illuminated paraffin 4
1. Introduction
Agricultural inputs hold the potential to improve agricultural productivity with the ultimate goal of
maximising agricultural productivity. Agricultural inputs remain a great determinant of yields in
agricultural production. Agriculture has become extremely dynamic and the adoption of technology
in the development of inputs has subsequently improved. The Input Cost Monitoring report, published
by the National Agricultural Marketing Council (NAMC), is a quarterly report analysing selected
agricultural production input prices in domestic and international markets. The objective of this report
is to compile information that will path both historical and current trends of selected agricultural
production input prices in South Africa versus the international perspective.
The data for this publication were obtained from Grain South Africa (Grain SA), Department of Energy
and the South African Grain Information Service (SAGIS).
2. International price trends for selected fertilisers
In Figure 1, the prices of international fertilisers indicate continuous fluctuations. From December
2012 to December 2018, the international price in Rand terms of Di-Ammonium Phosphate (DAP),
Urea and Muriate of Potash (MOP) increased by 22.8%, 12.4% and 0.2%, respectively. During the
same period the R/$ exchange rate depreciated by 65.4%. Measured in US Dollar terms, the prices
of MOP, Urea and DAP decreased by 39.4%, 32.0%, and 25.7%, respectively.
From December 2017 to December 2018, the international price (Rand terms) of Urea, MOP and DAP
increased by 43.6%, 29.4% and 0.2%, respectively. During the same period the Rand/US Dollar (R/$)
exchange rate depreciated by 8.7%.
150 110
130 100
Fertilizer index Jan 2016 = 100
R/$ Index Jan 2005 = 100
110 90
90 80
70 70
50 60
30 50
Mar-13
Jun-13
Mar-14
Jun-14
Mar-15
Jun-15
Mar-16
Jun-16
Mar-17
Jun-17
Mar-18
Jun-18
Dec-12
Sep-13
Dec-13
Sep-14
Dec-14
Sep-15
Dec-15
Sep-16
Dec-16
Sep-17
Dec-17
Sep-18
Dec-18
Urea Di-Ammonium Phosphate (DAP)
Muriate of Potash (MOP) R/$ Exchange rate
Figure 1: International price trends for selected fertilisers
Source: Own calculations based on data from Grain SA, 2019.
1
INPUT COST MONITOR: Trends in selected agricultural input prices – an update
January 2019
3. Domestic price trends for selected fertilisers
Figure 2, shows the trend of domestic fertiliser prices, between December 2012 and December 2018.
From December 2012 to December 2018, the prices of Urea, Mono-Ammonium Phosphate (MAP),
and Potassium Chloride (KCL) increased by 15.3%, 14.0% and 7.2%, respectively. From December
2017 to December 2018, the domestic prices of Urea, MAP and KCL increased by 15.0%, 5.8% and
5.7%, respectively.
120
110
100
Fertilizer index Jan 2016 = 100
90
80
70
60
Mar-13
Mar-14
Mar-15
Mar-16
Mar-17
Mar-18
Jun-13
Jun-14
Jun-15
Jun-16
Jun-17
Jun-18
Dec-12
Sep-13
Dec-13
Sep-14
Dec-14
Sep-15
Dec-15
Sep-16
Dec-16
Sep-17
Dec-17
Sep-18
Dec-18
MAP Urea Potassium Chloride
Figure 2: Domestic price trends for selected fertilisers
Source: Own calculations from price lists, 2019.
4. Fuel prices
The domestic petrol price is linked to the international price of crude oil (US$ per barrel). Crude oil
prices combined with the Rand/Dollar (R/$) exchange rate have a major impact on domestic fuel
prices (Department of Energy, 2019). In Figure 3, the prices of crude oil, petrol and diesel follow
similar trends. From January 2013 to January 2019, the price of petrol and diesel increased by 1.1%
and 0.8% respectively, while the US$ price of crude oil decreased by 28.0%. The price of crude oil (in
Rand terms) decreased by 85.0% during the same period, mainly due to high levels of uncertainty
surrounding global economic growth forecasts, which was intensified by easing geopolitical tension
and by the potential negative impact of US-China trade dispute on the global economy (OPEC, 2019).
From January 2018 to January 2019, the prices of petrol and diesel decreased by 2.8%, and 0.8%
respectively. The price of crude oil (US$ terms) decreased by 16.7%, with 17.0% depreciation of the
Rand.
2
INPUT COST MONITOR: Trends in selected agricultural input prices – an update
January 2019
130 18,3
115 16,4
Fuel price (R/litre) & R/$ exchange
100 14,5
Crude oil (US$/barrel)
85 12,6
70 10,7
55 8,8
40 6,9
25 5,0
Apr-13
Oct-13
Apr-14
Oct-14
Apr-15
Oct-15
Apr-16
Oct-16
Apr-17
Oct-17
Apr-18
Oct-18
Jul-13
Jul-14
Jul-15
Jul-16
Jul-17
Jul-18
Jan-13
Jan-14
Jan-15
Jan-16
Jan-17
Jan-18
Jan-19
Crude oil Diesel 0.05% S Gauteng Petrol 95 ULP Gauteng R/$ Exchange rate
Figure 3: Crude oil and fuel prices
Source: Grain SA and Department of Energy, 2019.
5. Baltic Dry Index
The Baltic Dry Index (BDI) measures international freight rates for dry bulk cargo affected by both the
demand to move raw materials internationally, and the supply of shipping capacity. The BDI is
calculated on a monthly basis and it used May 2005 as its base of 6 000. The Grain Freight Index
(GFI) measures movements in rates for ocean transportation of grains. In May 2018, the International
Grain Council (IGC) introduced new Grain and Oilseeds Freight Index (GOFI) with January 2013 as
its base year and it represents 68 major grain routes. Figure 4 shows that the BDI increased by 27.0%
between January 2013 and January 2019. From January 2018 to 2019, the BDI increased by 146.0%.
In January 2019, the BDI was 1 731 index points. Between May 2018 and January 2019, the GOFI
was and in January 2019 it was …..
6000 150
Baltic Dry Index (BDI)
Grain Freight Index (GFI)
5000 145
BDI and GFI (May 2005=6000)
Grain & Oilseed Freight Index
GOFI (January 2013=100)
(GOFI)
4000 140
3000 135
2000 130
1000 125
0 120
Mar-13
May-13
Mar-14
May-14
Mar-15
May-15
Mar-16
May-16
Mar-17
May-17
Mar-18
May-18
Jul-13
Jul-14
Jul-15
Jul-16
Jul-17
Jul-18
Jan-13
Jan-14
Jan-15
Jan-16
Jan-17
Jan-18
Jan-19
Sep-12
Nov-12
Sep-13
Nov-13
Sep-14
Nov-14
Sep-15
Nov-15
Sep-16
Nov-16
Sep-17
Nov-17
Sep-18
Nov-18
Figure 4: Baltic Dry Index versus Grain and Oilseeds Freight Index
Source: SAGIS, 2019.
3INPUT COST MONITOR: Trends in selected agricultural input prices – an update
January 2019
6. Illuminated paraffin price
Consumers utilize paraffin as an important part of their household energy mix, classified as an
essential backup fuel. Figure 5 depicts the price of illuminated paraffin for the Coastal and Gauteng
regions during January 2016 to January 2019. During this period, the price of illuminated paraffin for
the Gauteng and Coastal regions increased by 35.7% and 30.2%, respectively.
Between January 2018 and January 2019, the price of illuminated paraffin in Gauteng increased by
5.4% whilst the Coastal regions decreased by 1.4%, respectively. In January 2019, the price of
illuminated paraffin in Gauteng reached R8.82/litre compared to the Coastal regions’ price of
R7.68/litre.
12,00
11,00
10,00
9,00
R\litre
8,00
7,00
6,00
5,00
Jan-16
Apr-16
Jul-16
Oct-16
Jan-17
Apr-17
Jul-17
Oct-17
Jan-18
Apr-18
Jul-18
Oct-18
Jan-19
Illuminated Paraffin Gauteng Illuminated Paraffin Coastal
Figure 5: Comparison of illuminated paraffin price between Coastal regions and Gauteng
Source: Department of Energy, 2019
4INPUT COST MONITOR: Trends in selected agricultural input prices – an update
January 2019
Compiled by:
Trends and discussion on selected topics:
Corné Dempers
Fezeka Matebeni
Enquiries: Christo Joubert: +27 12 341 1115
© 2019. National Agricultural Marketing Council.
Disclaimer:
Information contained in this document results from research funded wholly or in part by the NAMC,
acting in good faith. Opinions, attitudes and points of view expressed herein do not necessarily reflect
the official position or policies of the NAMC. The NAMC makes no claims, promises or guarantees
about the accuracy, completeness or adequacy of the contents of this document and expressly
disclaims liability for errors and omissions regarding the content thereof. No warranty of any kind,
implied, expressed, or statutory, including but not limited to the warranties of non-infringement of third
party rights, title, merchantability, fitness for a particular purpose or freedom from computer virus is
given with respect to the contents of this document in hardcopy, electronic format or electronic links
thereto. Reference made to any specific product, process, and service by trade name, trade mark,
manufacturer or another commercial commodity or entity are for informational purposes only and do
not constitute or imply approval, endorsement or favouring by the NAMC.
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