South Africa’s Wheat Farmers Face Surging Input Costs and Slumping Global Prices
South African wheat farmers warn that soaring production costs and falling global prices are pushing the sector into crisis. Grain SA says delayed action on revising wheat import tariffs—requested in June 2024—is worsening pressure as imports surge during harvest, depressing local prices despite higher domestic output. Rising stockpiles and escalating input costs deepen concerns over long-term viability.
Wheat producers in South Africa are sounding the alarm as soaring production costs and a collapse in global wheat prices place unprecedented pressure on the sector, deepening concerns about the country’s long-term commitment to safeguarding local wheat production.
According to a statement shared with the media by Grain SA, the situation has reached a critical point saying that despite applying—together with South African Cereals and Oilseeds Traders Association (SACOTA)—for a review of the wheat import tariff as far back as June 2024, no decision has been made more than a year later.
This delay, Grain SA warns, is compounding financial strain and creating uncertainty for farmers heading into another challenging season.
Industry players argue that the prolonged regulatory inaction—combined with market behaviour—raises tough questions about whether South Africa’s wheat value chain is genuinely invested in supporting local producers.
One of the strongest concerns is the consistent rise in wheat imports right before and even during the domestic harvest season. Producers say these poorly timed imports flood the market between August and late October, suppressing prices just as farmers prepare to sell their grain.
Bread Prices Move Up—Even When Wheat Prices Fall
While adjusting the import tariff often sparks fears of higher bread prices, Grain SA’s data shows a clear disconnect between wheat and bread price movements.
Over the past two decades, domestic wheat prices have declined sharply, yet retail bread prices have continued to climb.
The organisation argues that this long-term divergence suggests tariff changes aimed at supporting farmers would have a minimal impact on consumers.
Imports fuel rising stockpiles, depressing producer prices
Figures shared by Grain SA and SAGIS reveal that South Africa has produced more wheat in the past three seasons than the ten-year average. Despite this, imports continue to outpace demand, contributing to a build-up of unutilised stock.
These elevated carry-over stocks are weighing heavily on domestic prices—even as farmers contend with escalating fertilizer, fuel, chemicals and logistics costs.
Producers emphasize that although South Africa remains structurally dependent on wheat imports, timing is everything. They argue that allowing surges in imports during harvest months undermines producers and weakens the market at exactly the wrong time.
Western Cape: Rising output, yet rising imports
The Western Cape—home to the country’s largest dryland wheat area—mirrors the national picture. Even as provincial production has grown substantially, imports entering through the Cape Town Harbour have also increased.
In many seasons, producer deliveries far exceed local processing needs, yet imported wheat continues flowing into the system.
Data from SAGIS shows consistent seasonal surpluses in the Western Cape, prompting farmers to question why imports are still entering the regional market, particularly during harvest periods when locally produced wheat is abundant and available.
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Source : Farmers Review Africa
