South Africa’s wheat industry is under severe pressure and facing mounting financial strain due to a prolonged delay in reviewing the wheat import tariff, Grain SA has warned.
The organisation, which represents grain and oilseed producers of all sizes, from smallholders to large commercial operations, said many producers were now operating below sustainable levels as global wheat prices plunged to historical lows, eroding income and raising concerns about the future viability of local production.
In June 2024, Grain SA and the South African Cereals and Oilseeds Trade Association (Sacota) jointly submitted a request to the International Trade Administration Commission (Itac) to review the wheat tariff reference price and implement an automated, transparent tariff-publishing system. The goal was to ensure the tariff responds timeously to global price movements so that producers are not left exposed during severe market downturns.
However, the industry is still waiting for the commission to take action.
“During this period of inaction, wheat prices have dropped a further 15%, leaving local wheat farmers without a tariff that reflects current market conditions, at a time when they need it most, and pushing local farmers deeper into financial distress,” Grain SA said.
“Without an updated tariff, South African producers are forced to compete directly with heavily subsidised imports, particularly damaging when imported wheat enters the market during the local harvesting period.”
The process was prolonged when the National Chamber of Milling did not support the Grain SA-Sacota proposal and instead called for Itac to undertake a broader methodology review.
“This significantly added responsibility and extended timelines while farmers continue to shoulder escalating financial pressure. Notably, several milling and processing companies have reported improved financial performance in recent annual results, underscoring the imbalance across the value chain,” Grain SA said.
“Public concerns about tariffs often raise fears of rising food prices, yet the data shows the impact on consumers proved to be minimal. A R1 000/ton increase in the wheat price would add only about 63 cents to a loaf of bread. Wheat accounts for just 18% of the final retail price, with the remaining costs arising further along the wheat processing value chain.”
Grain SA chairperson, Richard Krige, warned that the industry could not absorb prolonged uncertainty.
“Local producers cannot compete with highly subsidised wheat imports, especially when those imports arrive during our harvest. Every delay tightens the pressure on farmers who are already stretched to breaking point,” Krige said.
Grain SA has asked the Minister of Agriculture, John Steenhuisen, to intervene and accelerate the conclusion of a new reference price and the proposed automated tariff-publication mechanism.
“A timely decision is now critical to prevent irreparable damage to the wheat sector and to safeguard South Africa’s long-term food security. We cannot afford continued silence. Producers need certainty,” the association said.
