Agriculture remains central to South Africa’s economy and political developments. We have just witnessed how the sector’s issues, including foot and mouth disease, were prominent in recent political matters that led to the Cabinet reconfiguration.

Therefore, for the readers of this news organisation, The Common Sense, it is only right that we start a column that makes sense of some agricultural and land matters that ultimately influence the bigger issues that shape our economic and political futures.

But as this is my first column for The Common Sense, I will set aside domestic matters and start by reflecting on broad global agricultural developments that remain topical. The developments in the Iran-United States (US) war are one such issue, and we are all hoping for a lasting peace deal.

You see, when the Iran-US war started, among other things, many of us in South Africa’s agriculture sector were deeply concerned about the rise in fuel and fertiliser prices. The products combined account for roughly half of the farmers' input costs in various commodities we produce.

There were also growing concerns about the war's impact on global food prices, as some began to compare it to the food price shock the world experienced after the start of the Russia-Ukraine war in 2022.

Two Factors

But this comparison had some flaws, and we had doubts about whether the global food price shocks could be comparable to the Russia-Ukraine one. Two major factors distinguish the Ukraine-Russia war from the one in the Middle East, thus ultimately shaping their impacts on agriculture and food prices in distinct ways.

First, there are currently ample global grain supplies, which are adding significant downward pressure on prices. For example, the International Grains Council forecasts the 2025-26 global grains and oilseed production at 2.5 billion tonnes, up 9% from a year ago. These include maize, wheat, soybean, and rice, among major grains and oilseeds. These are not the only agricultural value chains that saw a robust harvest. We also saw ample harvests of various fruits and nuts across major producing countries worldwide.

Second, the Middle East is not a major grain-producing region but an importer; therefore, a war at a time when we have ample grain supplies was unlikely to lead to an immediate notable surge in grain prices. Still, the war's impact on the fertiliser market was evident, raising concerns ahead of the 2026-27 agricultural season.

The impact of the challenge, however, would have been more apparent in 2027 and into 2028. But with now a likely peace path, we may see fertiliser and oil prices continuously softening, which eases this likely risk for the 2026-27 agricultural season, although not completely, as some countries may have already imported fertiliser at high prices and would pass those costs on to farmers, who would ultimately have final decision-making on area plantings in the 2026-27 agricultural season.

A decline in area planting would reduce agricultural supplies. Still, it remains too early to tell how the upcoming season will shape up globally, although the countries in the Northern Hemisphere have generally completed their planting season.

In fact, the data released on 3 July 2026 by the Food and Agriculture Organisation of the United Nations (FAO) already signal that the concerns of a global food price surge should ease. The FAO’s Global Food Price Index, a measure of the monthly change in international prices of a basket of food commodities, fell mildly by 0.3% from May, and is now at 130 points. Sugar, grains, and dairy products were the key drivers of the easing in global food prices.

Better Environment

With the likely end of the Iran-US war, the environment over the coming months may be much better for global food prices than some feared a few months ago. If we consider the global food prices and compare them with the start of the Russia-Ukraine war, the FAO’s Global Food Price Index in June 2026 was 19% below its March 2022 peak, when the Russia-Ukraine war began. This underscores our earlier point that the impact of the Iran-US war on global food prices would not be as severe as at the start of the Russia-Ukraine war, and that comparisons at the time were exaggerated.

Still, this mild softening in global food prices and the likely peace deal does not mean there aren’t concerns about the direction of global food prices. Risks remain due to a likely El Niño-driven drought in some parts of the world.

Ultimately, the farmers’ planting decisions and the harvests of the 2026-27 production season will shape the coming year’s global food prices.

Here in South Africa, farmers will start planting their 2026-27 summer crop in October. We continue to believe that better soil moisture and higher dam water levels will help South Africa have a better start to the season than during recent droughts.

We are coming from a season with a longer rainy period through May 2026, compared to the typical rainfall window, which usually ends around March.

Moreover, the ample grain harvests in the 2025-26 season, estimated at a record 21.49 million tonnes, up 5% year on year, are another important factor that will cushion South Africa's food supplies. We also think the grazing pastures remain in better condition.

The one factor that was deeply worrying us was higher fuel and fertiliser prices ahead of an already tough season due to the likely drought. Now that these prices are softening, the conditions are shaping up slightly better for South Africa and the global farming community. Still, much of this hinges on the peace deal between Iran and the US.

Wandile Sihlobo is the presidential envoy on agriculture and land. He is also the chief economist of the Agricultural Business Chamber of South Africa, and a senior research fellow in the Department of Agricultural Economics at Stellenbosch University.