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South Africa wheat import tariff lowered to R298.46/tonne from R640.54/tonne

The wheat import tariff rate of R298.46 per tonne that triggered on 14 August 2018 was finally published in a government gazette on 28 September 2018, making it an official rate. This is a decline from a previous rate of R640.54 per tonne.

Nonetheless, this could be short-lived due to a newly triggered higher rate of R490.72 per tonne on 11 September 2018. This was underpinned by a decline in global wheat prices (No2 HRW) at the time. The newly triggered rate will only be applicable after its publication on the government gazette. The timeframe for this process is unclear, but previous adjustments took more than three weeks..

The trade policy aspects are important as South Africa is expected to import 1.4 million tonnes of wheat in the 2018/19 marketing year which commenced this week. Although this is 33 percent lower than the previous season’s volume due to a potential uptick in local production, it is still a notable volume.

In terms of regional perspective, the International Grains Council forecast Africa’s 2018/19 wheat production at 28 million tons, up by 4% from the previous season due to expectations of a fairly good harvest in South Africa, Algeria and Morocco. While this is a welcome development, the continent remains a small player in the global wheat market, accounting for roughly 4 percent of the expected 717 million tons in the 2018/19 season.

 The leading wheat producing countries in Africa are Egypt, Morocco, Ethiopia, Algeria, South Africa and Tunisia, collectively accounting for 95 percent of the continent’s harvest. The remaining 5 percent is produced by other countries on the continent.

 Nonetheless, this will not fulfil the continent’s annual wheat needs. Africa’s 2018/19 wheat imports are estimated at 51 million tons, down by 2 percent from the previous season. The North African countries are the largest importers as bread is one of the staple foods in a number of countries such as Egypt, Algeria and Morocco. In the sub-Saharan region, Nigeria, Sudan, Kenya, Ethiopia and South Africa are the leading wheat importers.

AGBIZ


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