The hardening positions by the US and China on their year-old trade war ahead of high-stakes talks in Washington, will likely have an impact on June’s petrol price in South Africa, along with the introduction of a carbon tax by the local government.

As an importer of oil products, South Africa is already sensitive to changes in the international oil price.

This week, US president Donald Trump threw trade talks between the world’s two largest economies into disarray as he threatened to raise tariffs on Chinese imports, roiling global markets.

Trump threatened not only to more than double tariffs on $200 billion of Chinese exports to the US, but also raised the possibility of imposing a 25% tariff on an additional $325 billion of goods.

Bloomberg reported that China’s top trade envoy, vice premier Liu He, is due to land in the US capital on Thursday afternoon and go immediately into discussions with Trump’s top negotiator, Robert Lighthizer.

And trade war concerns, along with a global oversupply of oil, has caused Brent crude prices down towards $70 a barrel.

Impact on South Africa

For South Africa, a drop in oil prices would point to a short-term win. According to the latest data from the Central Energy Fund (CEF) of South Africa, the most recent drop in the price is having a net positive effect on the outlook for local petrol prices.

Chiti Makwetu’s farm is a long way away from the main road. That, he believes, is why his government has been ignoring him. One day last September, he complained that efforts to install electricity have been limited to properties near the road—a ploy, he suggested, to convince passersby of the government’s commitment to the area. Meanwhile, land farther from view, like his, has been neglected. “We are literally off the grid,” he said.

In a televised interview, the former president said the ANC under his leadership never prioritised land reform because numerous other demands seemed far more pressing.

The 2018/19 season has proved to be one of the most difficult seasons for the table grape industry, due to difficult growing conditions and a market flooded with product, leading to lower prices. In spite of a difficult season the ARRA varieties, managed by TopFruit, still received positive feedback from growers and the markets.

Agri SA is an agricultural representative organisation that is committed to the development of agriculture in South Africa. We are a non-profit organisation that is helping to develop a stable, profitable agricultural environment within this country.

Not many agricultural subsectors are a testimony to the export-led growth ambition that the South African government is currently focusing on such as avocados.