Record-high diesel price offers traders new hedging opportunities

The Johannesburg Stock Exchange (JSE), which manages South Africa's futures exchange, has introduced contracts that allow investors to protect against changes in diesel prices that were raised to a record on Wednesday.

The diesel-hedge contracts started trading on February 20, JSE commodities derivatives director Chris Sturgess said.

"Anyone who is in the logistics business will be the biggest user," Sturgess said on the sidelines of a conference in the Free State province town of Bothaville. "We are talking from farmers to mining companies."

The department of energy increased the price of diesel in Gauteng province by 2.1% to a record R13.39 per litre for March starting on Wednesday after the average rand-dollar exchange rate declined in February from a month earlier.

The rand slumped to the weakest level since October 2008 against the dollar on January 30. Africa's biggest economy imports about 70% of its oil needs, processing the remainder of its fuels from coal and gas.

One contract is for 5 000 litres, and prices are quoted in rand per litre, the JSE said in a presentation on its website. Rand Merchant Bank, the investment- banking unit of FirstRand, South Africa's second-largest lender, acted as the first market maker, it said.

Diesel and fertilisers are the two biggest costs for farmers, said Jannie de Villiers, the chief executive of Grain SA, the biggest representative of commercial farmers in South Africa.

"Farmers need to embrace it and they need to understand how it works and try to make use of it to hedge their costs," he told reporters, referring to the diesel contract. – Bloomberg

Advertisting

Stay in China, government tells homesick South Africans

As ‘impisoned’ children at epicentre cry to be reunited with their parents, top official says families mustn’t be ungrateful

Cradock Four back to haunt De Klerk

Pressure is mounting on the NPA to charge the former president and others involved in political killings during apartheid

Ramaphosa makes peace with Malema over gender-based violence comments

In his Sona response, the president apologised for the weaponising of gender-based violence, saying the attack on the red beret leader was "uncalled for"

Steenhuisen takes the lead in DA race while Ntuli falters

‘If you want a guarantee buy a toaster. This is politics’
Advertising

Press Releases

Response to the report of the independent assessors

VUT welcomes the publishing of the report of the independent assessors to investigate concerns of poor governance, leadership, management, corruption and fraud at the university.

NWU student receives international award

Carol-Mari Schulz received the Bachelor of Health Sciences in Occupational Hygiene Top Achiever Award.

Academic programme resumes at all campuses

Lectures, practicals, seminars and tutorials will all resume today as per specific academic timetables.

Strategic social investments are a catalyst for social progress

Barloworld Mbewu enables beneficiaries to move away from dependence on grant funding

We all have a part to play to make South Africa work

Powering societal progress demands partnerships between all stakeholders

So you want to be a social entrepreneur?

Do the research first; it will save money and time later

Social entrepreneurship means business

Enterprises with a cause at their core might be exactly what our economy desperately needs

Looking inwards

Businesses are finding tangible ways to give back – but only because consumers demand it