Grain SA has released a new briefing note outlining what it believes are five key factors overlooked by the International Trade Administration Commission of South Africa (ITAC) in its recent wheat tariff decision.
The briefing, “Five Facts ITAC Missed in the Wheat Tariff Decision,” follows the Government Gazette’s decision to retain the Dollar-Based Reference Price (DBRP) for wheat at US$279 per ton and reject the automatic trigger mechanism requested by Grain SA and the South African Cereals and Oilseeds Trade Association (SACOTA).
According to Grain SA Chairperson Richard Krige, the decision should not be viewed only as a technical trade matter, but as one with implications for producer confidence, rural jobs and South Africa’s long-term food security.
Declining Wheat Hectares
Grain SA argues that while ITAC focused on improved wheat yields and production growth, wheat hectares are declining because producers are questioning the profitability and long-term viability of wheat production.
Farm-Level Economics
The organisation disputes ITAC’s conclusion that the current US$279 per ton DBRP provides adequate protection.
Grain SA maintains that theoretical profit margins do not reflect the realities on wheat farms, where producers continue to face rising input costs, financing expenses, exchange-rate movements, logistics costs and production risks.
Rising Input Costs
While ITAC concluded that farm-gate wheat prices have increased faster than production costs, Grain SA says its analysis shows that wheat prices have not kept pace with rising expenditure on fertiliser, fuel and crop protection products, placing continued pressure on producer profitability.
Import Parity
Grain SA also disputes ITAC’s conclusion that local producers maintain a pricing advantage over imported wheat.
According to the organisation, local wheat prices have consistently traded below import parity once marketing and storage costs are taken into account, contradicting ITAC’s findings.
Quality Must Be Rewarded
Grain SA argues that South African producers are expected to supply premium-quality wheat, yet the market and policy environment do not adequately reward the additional costs and risks involved.
“If the market wants premium-quality local wheat, that quality must be paid for,” said Krige. “A producer cannot indefinitely carry the cost and risk of producing premium quality if neither the market nor the policy environment supports a fair price for that quality.”
The organisation warns that producers may increasingly prioritise yield and gross margin over premium quality to remain financially sustainable.
Grain SA Seeks Answers
Grain SA has formally requested the full report and supporting evidence on which the Government Gazette decision was based, stating that applicants have not yet received direct official communication from ITAC explaining the reasons for rejecting the application.
The organisation is also calling for an urgent solution to tariff implementation delays, reconsideration of the current DBRP, quality-adjusted comparisons between imported and locally produced wheat, greater recognition of quality premiums, and closer alignment between trade policy and government’s localisation objectives.
“A tariff mechanism that is calculated but implemented too late cannot be described as effective protection,” said Krige. “Producers need certainty, transparency and a system that works in practice, not only in theory.”
Grain SA says it is not asking for protection from competition or a guaranteed profit. Instead, it is calling for a fair, predictable and evidence-based environment in which South African producers can compete and continue producing wheat for the country.
“The question is not whether South Africa can afford to support wheat producers,” said Krige. “The question is whether South Africa can afford to lose them.”