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As global trade tensions intensify and agricultural markets become increasingly volatile, Grain SA has warned that South Africa’s slow response to rapidly changing global trade conditions is placing local grain producers under growing financial pressure.
Ahead of today’s NAMPO Harvest Day panel discussion titled “Trade Wars, Tariffs & Opportunities”, Grain SA said the prolonged delay in finalising the wheat tariff review has become a critical concern for the local grain industry, particularly as South African wheat producers continue to competing against heavily subsidised producers in major wheat-producing countries across the word.. A joint application by Grain SA and SACOTA to amend the current tariff-based reference price and automate the prolonged tariff publication process was submitted in June 2024, at a time when the local wheat industry was already under severe pressure.
Grain SA stressed that South African producers do not compete on equal footing in global markets, with many international wheat industries receiving significant government support, subsidies and protection measures that local producers simply do not have access to.
The organisation said the wheat tariff mechanism remains one of the only available tools to protect South African wheat producers against distorted global market conditions and unfairly subsidised imports, making an effective and responsive tariff system critical for the sustainability of the local wheat industry.
“The tariff system is not about protectionism - it is about ensuring South African producers are not forced to compete against heavily subsidised imports without any effective local mechanism to offset those distortions,” said Richard Krige.
“We need a tariff system that works for producers in real time and responds effectively to rapidly changing global market conditions. Producers cannot absorb endless delays while competing against countries that actively support and protect their agricultural sectors.”
The organisation warned that global trade dynamics are no longer abstract policy discussions for South African agriculture, but are already directly affecting producer profitability, planting decisions, local production sustainability and long-term food security.
“Trade Wars, Tariffs & Opportunities it is already affecting the sustainability and competitiveness of domestic grain production,” said Richard Krige.
“South African producers are expected to compete globally, but too often they are doing so without the policy responsiveness and trade certainty available to producers in competing countries.”
In June 2024, Grain SA and SACOTA jointly applied to the International Trade Administration Commission (ITAC) for an increase in the domestic dollar-based reference price for wheat, as well as improvements to the implementation methodology of wheat import tariffs to ensure more responsive and transparent adjustments.
The organisations argued that the existing tariff system no longer adequately protects local producers against heavily subsidised imports and volatile international market conditions, while delays in tariff implementation undermine the effectiveness of the mechanism itself.
Although the application process has now been ongoing for nearly two years, the industry is still awaiting final implementation.
During this period, global wheat prices have declined further, while South African producers continue to face escalating input costs, infrastructure challenges, logistics pressures and ongoing uncertainty around trade policy implementation. Grain SA recently warned that many local wheat producers are already operating below sustainable levels.
“Every month of delay matters,” Krige said. “Producers are making production and investment decisions in one of the most volatile global trade environments in years, yet the industry is still waiting for the outcome of a tariff application submitted almost two years ago. Policy delays in highly volatile markets have real economic consequences.”
Grain SA stressed that its position is not anti-trade, but rather in favour of fair, predictable and rules-based trade regime that recognise and support the strategic importance of maintaining domestic food production capacity in the face of the realities of international agricultural support practices.
The organisation noted that South Africa’s wheat tariff system is specifically designed to offset distortions created by subsidised international production and abnormal market conditions, rather than artificially inflating food prices.
Historical industry analysis has consistently shown that the producer wheat price contributes only a relatively small portion to the final retail price of bread, while the broader economic value of sustaining local wheat production extends throughout rural economies and agricultural value chains.
Grain SA further warned that increasing geopolitical tensions, export restrictions, regional conflicts and supply chain disruptions continue to reinforce the importance of maintaining local agricultural production capacity and reducing vulnerability to external shocks.
“If South Africa wants resilient agricultural value chains, sustainable rural economies and long-term food security, then producer profitability and policy certainty cannot become secondary considerations,” Krige added.
“Countries across the world are actively positioning and protecting strategic agricultural sectors. South Africa must decide whether it wants to shape its own agricultural trade future - or simply continue reacting to forces beyond its control.”
The organisation said NAMPO continues to provide an important platform for engaging policymakers, producers, agribusinesses and industry stakeholders on the future competitiveness of South African agriculture in an increasingly uncertain global trade environment.
“The sector can only navigate these cycles through partnership, transparency and practical collaboration,” Krige concluded. “NAMPO provides an important platform to engage openly on the challenges facing the sector, while also driving practical solutions that improve competitiveness, expand markets and secure the future sustainability of grain production in South Africa.”
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