Sasol's move to settle its involvement in possible price fixing in the fertiliser industry comes as no surprise, Grain SA said on Thursday.
"Competition in the fertiliser industry has been under suspicion for more than a decade," said Neels Ferreira, chairperson of Grain SA, in a statement.
Grain SA was reacting to Sasol's application, together with other fertiliser companies, to the Competition Commission for leniency after it found evidence of price-fixing during an internal review.
Ferreira said Grain SA had had discussions with authorities on possible price fixing in the fertiliser industry on several occasions in the past.
He said fertilisers made up about 35 percent of the variable production costs of a grain and oilseed producer and, as such, had a significant impact on the profitability of grain production.
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"It is therefore of importance to Grain SA that, given the large concentration of industries providing input to agriculture, competition on the input side is as fair as possible."
Ferreira said the lack of competitive behaviour meant fertiliser prices had probably been kept at higher levels artificially than would otherwise have been the case.
"It is a relief that finality could be reached in regard to the alleged price binding by fertiliser companies over the years," he said.
Nevertheless, Ferreira said it was regrettable that more and more agriculture-related industries were being targeted by the Competition Commission.
"Being exposed as transgressors of the Competition Act is damaging to the general image of agriculture," he said. - Sapa
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