Why Producers Are Worried About Viability of South Africa's Wheat Industry

Policy Pressure Builds

South Africa’s wheat industry has come under extreme pressure from prevailing market and policy conditions, and producers are concerned the situation could collapse the agricultural subsector, which is the country’s second-largest source of grain after maize.

South Africa’s nonprofit organization representing grain and oilseed producers, Grain SA, says a mix of unfavorable wheat import tariffs, increasing farm input costs and volatility in international wheat prices is threatening the viability of South Africa’s commercial wheat industry, a source of the second-most-consumed grain in the country.

Grain SA Chief Executive Officer Tobias Doyer says wheat producers in South Africa are no longer “talking about weathering another difficult season but are questioning whether wheat still has a place in their crop mix under the current system.”

For instance, South Africa’s wheat farmers, estimated at between 3,800 and 4,000, are concerned about the unresolved process of implementing the wheat import tariff policy, even after Grain SA and the South African Cereals and Oilseeds Trade Association (SACOTA) called for a review of the strategy in early 2024 to safeguard domestic wheat production.

“In recent seasons, wheat imports have increased just before and even during the local harvest, exerting direct downward pressure on producer prices,” Grain SA previously said.

Tariff Uncertainty and Delays

Grain SA and SACOTA, in their 2024 joint application to the International Trade Administration Commission of South Africa (ITAC), an institution dedicated to promoting fair trade in South Africa, sought an increase in the U.S. dollar-based reference price of wheat from $279 per ton to $289 per ton and consideration for implementing an automatic trigger mechanism for the import tax.

They termed the tariff rate at the time “insufficient to support local wheat production and self-sufficiency.”

A higher import tariff, the organizations argued, would mitigate increasing production costs and competition from subsidized imports that pose a threat to local wheat farmers.

Both Grain SA and SACOTA argued the prevailing tariff structure at the time of their application favored imports, risking domestic food supply, with South Africa’s historical self-sufficiency in wheat declining from 93% to 55%.

However, in March 2026, South Africa unveiled a new wheat import tax with major adjustments compared to the previous one after ITAC triggered the latest tariff calculation to mitigate the impact of global wheat market volatility.

According to the South African Grain Information Service (SAGIS), a government-backed agency with a mandate to gather, process, analyze and publish agronomic data, there is a substantial reduction in the proposed import tariff to ZAR 153.55 ($8.95), down from ZAR 619 ($36.06), which has been in effect since Feb. 13, 2026.

“The reduction of ZAR 465.45 ($27.12) per ton may further impact wheat production profitability, although the counterargument is that international wheat prices — and therefore the cost of wheat imports — have increased,” SACOTA’s statement said.

Although the association points to the recent $10-per-ton increase in global prices over three consecutive weeks to March 19, 2026, from the previous trigger level, prompting the downward revision in the tariff under the existing formula, it says South Africa’s wheat industry “now faces uncertainty regarding the timing of implementation.”

Implementation Gaps Frustrate Industry

SACOTA Research and Projects Manager Juan-Pierre Kotzé said the association is concerned about recurring delays between the date a new tariff is triggered and the actual implementation of new rates, which in some instances take up to six months.

“This delay in the implementation of the tariff remains a concern, particularly as the industry awaits feedback from ITAC on the proposed automation of the tariff implementation process,” said Kotzé.

SACOTA, which on March 4, 2026, sought the intervention of South Africa’s agriculture minister on the delays, says automation of the wheat import tariff implementation process, “similar to the fuel levy mechanism, would reduce delays and ultimately give the industry much-needed transparency and predictability.”

For instance, if the proposed automation of the tariff implementation process were in place, the new tariff of ZAR 153.55 ($8.95) should be implemented on April 1, 2026, nearly 10 days after it was triggered, according to SACOTA.

During the Grain SA Congress, held March 11–12, 2026, at NAMPO Park in Free State, wheat producers expressed frustration at the South African government’s inability to establish predictable timelines for wheat importation to avoid coinciding with the months immediately preceding the local harvest, mainly September and October — a trend they blamed for local oversupply and suppressed prices.

Grain SA, with more than 7,800 commercial members, said wheat imports entering the South African market during those two months “exert direct downward pressure on domestic prices at the most vulnerable point in the production cycle.”

"While South Africa has a variable wheat import tariff intended to provide a level of protection against depressed international prices, producers expressed deep frustration that administrative delays and lagged implementation have rendered the mechanism ineffective when it is most needed," it added.

Rising Input Costs Tighten Margins

Elsewhere, the increasing cost of inputs is worrying wheat producers, with Grain SA saying the trend has made it impossible for their product to effectively compete with imports, especially from countries where farmers have received government support during their production cycle.

“Despite easing global commodity prices, periods of currency strength and stabilizing energy indicators, producers reported limited downward movement in input prices, particularly for fertilizer, chemicals, energy and mechanization-related costs,” Grain SA said.

It said while producers “are expected to absorb falling output prices immediately, input costs have remained elevated and inflexible, further deepening the profitability squeeze at farm level.”

“If wheat producers are expected to compete globally, then the entire system must respond to changing conditions, and input suppliers, like all parts of the value chain, have a responsibility to contribute to restoring sustainability,” Doyer added.

Global Pressures Add to Strain

South Africa’s agriculture minister, John Steenhuisen, told more than 600 delegates at the Grain SA 2026 Congress that wheat producers in key growing areas such as Swartland, Overberg and the Southern Cape region have made it clear “wheat farming under current market and policy conditions is no longer economically sustainable, and intervention from the broader value chain is critical.”

“Economists have repeatedly shown that wheat contributes a relatively small proportion to the final bread price, yet producers carry the cost pressures, which are not evenly spread throughout the value chain,” Steenhuisen said.

Steenhuisen said a spike in input costs is to blame for the widening gap between production costs and farm returns.

“Almost all the active ingredients used in the production of agricultural inputs in South Africa are imported, meaning local producers are directly exposed to fluctuations in global commodity prices and movements in the rand-dollar exchange rate,” Steenhuisen said.

For instance, fertilizer accounts for approximately 35% to 50% of a wheat farmer’s production cost, depending on the region, with global fertilizer markets coming under severe pressure in the past three years following supply chain disruptions linked to the Russia-Ukraine conflict.

“South Africa imports more than 80% of its fertilizer requirements, which means these global shocks translate directly into local production costs,” Steenhuisen said.

The country’s dependence on input imports means South Africa is among the African wheat producers impacted by the ongoing crisis in the Middle East triggered by U.S. and Israeli actions involving Iran.

Steenhuisen cited the blockade of the Strait of Hormuz, a critical route for fertilizer exports from countries such as Oman, Qatar and Saudi Arabia, which he said has increased insurance risk premiums for vessels using the route from around 0.25% to 1% of cargo value, significantly raising shipping costs that ripple through the value chain.

He projects diesel prices to increase by around ZAR 4.40 ($0.26) per liter from April 1, 2026, yet fuel accounts for approximately 12% to 18% of production costs, saying "increases of this scale will directly affect producers preparing for winter planting and those harvesting summer crops.”

Production Outlook and Trade Dependence

The U.S. Department of Agriculture (USDA) projects South Africa’s wheat production in the 2026/27 marketing year at 1,940,000 metric tons, more than 50% of it from the Western Cape province, which it says in its latest Grain and Feed Annual report is marginally higher than the estimated 1,870,000 metric tons in 2025/26. A large share of the wheat is bread wheat, with smaller quantities of durum wheat produced in certain areas and used to produce pasta.

This output is less than the 3.5 million metric tons South Africa consumes, meaning the country relies on imports from producing countries such as Poland, Russia, Lithuania, Australia, Romania, Latvia, Argentina, the United States and Ukraine to meet domestic demand.

Some wheat is exported to neighboring countries such as Namibia, Botswana, Eswatini, Lesotho, Zimbabwe, Mozambique and Malawi, where it does not attract tax largely because South Africa benefits from a free trade agreement with these markets.

The area under wheat in South Africa is expected to decline slightly to approximately 500,000 hectares compared to an estimated 517,000 hectares for 2025/26 as producers grapple with a price-cost squeeze while others shift to more profitable alternative crops.

Strong competition from imports originating in countries that provide significant support to their wheat sectors through subsidies, insurance programs and direct cost relief is also pushing some South African wheat producers to reduce acreage.

“These factors collectively influence planting decisions, capital investment and producers’ willingness to expand wheat production. Without improvements in profitability, technological advancement or policy support, the wheat area is expected to remain unchanged in the foreseeable future,” USDA’s report adds.

Outlook Remains Uncertain

With domestic wheat production of nearly 2 million metric tons, far below the 3.5 million metric tons the country consumes, the South African government is obligated to explore how best to leverage the wheat farmers' resilience and innovation by addressing the prevailing hostile operating environment that has exerted strenuous pressures on the industry's profitability and long-term survival.

Shem Oirere is a freelance writer based in Nairobi, Kenya. He can be reached at shem@shemoirere.com.