Cap on price of Russian oil will impact local food prices, warns economist
An agricultural expert says the recently announced price cap on Russian oil is likely to have an impact on the cost of putting food on tables in our country.
This week the G7 group of economies adopted a price limit of 60 US dollar per barrel for oil sourced from Russia.
It's a means to limit that country's ability to keep funding its war against Ukraine.
But Russia, which is the world's second-biggest crude oil producer, has rejected the price cap saying it will withhold the export of oil to countries supporting the move.
READ: Russian oil price cap put to the test
Dawie Maree, an agricultural economist with FNB, says South Africa's farming sector is heavily dependent on imported Russian oil.
He says the decision will likely negatively affect the cost of certain produce, such as grain.
"Another impact is the by-products of the crude oil process in terms of fertilizer and chemicals, which is also big inputs into the grain industry. If that can be sustained, it will have a positive impact.
"However, we can expect that they will start reducing production again to push the price a bit higher because that will be to the benefit of their country."
