South Africa's wheat industry has challenged a government decision to retain the domestic dollar-based reference price at $279 per tonne, arguing that the current tariff framework does not adequately protect local farmers.
Trade, Industry and Competition Minister Parks Tau rejected an application by GrainSA and the South African Cereals and Oilseeds Trade Association to increase the reference price to $289 per tonne. The mechanism is used to determine the level of tariff protection applied to imported wheat.
The decision followed a two-year investigation by the International Trade Administration Commission of South Africa. The commission concluded that the existing price remained sufficient, estimating that it provided an 18 percent margin over average production costs and left domestic wheat with an approximate 16 percent price advantage over imports.
GrainSA disputed that assessment, saying producers face rising input and financing costs, unstable markets, logistics problems and subsidized international competition. The organization said South Africa had lost 19,000 hectares of wheat production over the previous five years and warned that a collapse of production in the Western Cape could threaten 8,500 jobs.
Industry representatives also argued that the current system does not reward the cost and risk associated with producing higher-quality wheat. GrainSA said it would examine all available options to challenge the decision, including possible legal action.
The cereals and oilseeds trade association separately criticized delays in tariff administration. It said a zero import tariff triggered on May 12 had still not been implemented by June 18, leaving consumers to pay more than they should for imported wheat.
South Africa imports about 1.8 million tonnes of wheat, equivalent to roughly half of domestic demand. The dispute now centers on whether the existing system offers proportionate protection to farmers while avoiding unnecessary costs for millers and consumers.