South Africa’s wheat industry faces mounting financial strain amid a prolonged delay in government’s review of the wheat import tariff, says industry body Grain SA.

Many producers are already operating below sustainable levels as global wheat prices plunge to historical lows, eroding income and raising serious concerns about the future viability of local wheat production.

Grain SA and industry body the South African Cereals and Oilseeds Trade Association (Sacota) in June last year submitted a request to the International Trade Administration Commission of South Africa (Itac) to review the wheat tariff reference price and asked that it implement an automated and transparent tariff publishing system.

The goal was to ensure that tariffs respond timeously to global price movements so that producers are not left exposed during severe market downturns.

However, 18 months after the submission, the industry is still waiting.

In 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.

Without an updated tariff, Grain SA says South African producers are forced to compete directly with heavily subsidised imports.

According to Grain SA, the Itac process was prolonged when the National Chamber of Milling did not support Grain SA and Sacota’s 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 states.

Additionally, 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/t increase in the wheat price would add only about 63c to the cost of 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. The consumer impact is therefore minimal, while the impact on producer survival is profound.

Grain SA chairperson Richard Krige warns that the industry cannot 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.”

Grain SA has requested Agriculture Minister John Steenhuisen to intervene and accelerate the conclusion of a new reference price and the proposed automated tariff-publication mechanism.

The organisation stresses that a timely decision is now critical to prevent irreparable damage to the wheat sector and safeguard South Africa’s long-term food security. “We cannot afford continued silence. Producers need certainty; the country needs a functional tariff system, and we need it now.”