South Africa lowers floating wheat import tariff amid rising global prices
South Africa has cut its wheat import tariff by about 75% to around $9 per tonne after global prices rose, according to South African Cereals and Oilseeds Trade Association. Farmers warn the move could pressure local producers, while rising fertilizer costs linked to tensions involving Iran may push wheat prices higher.
South Africa operates a system of floating import tariffs on wheat, which automatically adjust based on international market prices. Ahead of the new production season, rising global wheat prices triggered a significant reduction in the tariff, approximately 75%. According to the South African Cereals and Oilseeds Trade Association (SACOTA), the new tariff is around $9 per ton, down from the previous $36/ton (exchange rate R17.09/USD).
SACOTA noted that the tariff reduction could further affect the profitability of local wheat production, even though global prices and import costs have increased substantially. At Grain SA’s regional meetings earlier this year, concerns were raised about the pressure from cheap, subsidized imports and the need for a stable and responsive tariff mechanism.
Grain SA highlighted that wheat imports typically peak in September and October, just before the harvest in the Western Cape. However, delays in implementing the variable tariff reduce the mechanism’s effectiveness. Farm-gate wheat prices adjust quickly to the market, while the rest of the supply chain reacts more slowly, creating structural challenges for producers.
Independent agricultural economist Johan Willemse noted that the lower tariff will push SAFEX prices down and reduce imports, despite higher international prices in USD terms. Farmers in the Western Cape currently struggle to break even at wheat prices around $350–$360/ton, making season planning difficult.
Willemse also warned that the escalating conflict in the Middle East, following US and Israeli attacks on Iran, has not yet impacted wheat prices directly, but fertilizer costs are rising, which could push global wheat prices up by 30–40% over the next four months. Exchange rate fluctuations remain another source of uncertainty that could further influence wheat costs.
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Source : Ukr Agro Consult
