Petrol price increase

An already fragile rand was back on the ropes in trade on Thursday (12 May), put there by a strong dollar benefitting from risk aversion.

Grain producers and logistics companies in the agriculture value chain will feel the pain as closer to 80% of grain is transported by road. The war in Ukraine, bans on food exports such as palm oil, supply chain glitches and a drought curbing the US wheat crop have sent prices skyrocketing, Bloomberg reported. This will obviously push food inflation to remain above 6% in the near term,” the economist warned. “We are heading into increased activity in the agriculture calendar and demand and consumption of fuel is high. This afternoon we will also keep an eye on US PPI and jobless claims,” Botes said. “The R1.50 cents/ litre will be back into the fuel calculation – and considering the exchange rate depreciation of 9.0% month-on-month (m/m) and 11.4% year-on-year (y/y) so far with crude weakening by 5.4% m/m and 59.0% y/y, a further R3/ litre in fuel increases is possible in June 2022 if the relief measures are not extended or a new fuel price determination is implemented,” he said.