South Africa’s wheat sector on brink of collapse, warns Grain SA

Grain SA has sounded an alarm over what it describes as a worsening crisis in South Africa’s wheat industry, warning that escalating input costs, depressed international prices and weak market protection measures are placing the sustainability of domestic wheat production at risk.

The organisation has appealed to government, industry players and the public to act quickly to avert long-term structural damage.

In a statement, the autonomous and voluntary commodity body said farmers have reached a breaking point, stressing that the industry can no longer wait for intervention.

It cautioned that growers are under severe financial pressure and that without meaningful structural reforms, wheat production could decline permanently.

On 27 November, an import tariff equivalent to about US$ 33 per ton was triggered, with the Government Gazette process initiated through the South African Grain Information Service (SAGIS).

This followed a joint presentation by Grain SA and the South African Cereals and Oilseeds Trade Association (SACOTA) to the International Trade Administration Commission (ITAC) in October.

Their formal application, lodged in June 2024, called for an adjusted reference price and the introduction of an automatic tariff trigger linked to market conditions. A final ruling has yet to be issued.

According to Grain SA chairperson Richard Krige, current market conditions cannot sustain producer viability.

“Bread is a staple food for millions of South Africans, yet few realise that the farmers producing this essential crop are under immense pressure,” he said.

Grain SA estimates that production costs sit at roughly US$ 865 per hectare, requiring a break-even yield of at least 3.4 tons per hectare.

Krige noted that current price levels fall short of covering production costs, posing a real threat to farm sustainability.

The organisation emphasised the broader national consequences of an industry collapse. Wheat accounts for just 18% of the cost of a loaf of bread, meaning that increases in wheat prices would have only a limited effect on retail shelf prices. On a loaf costing around US$ 0.97, farmers receive just US$ 0.18.

The sector underpins an estimated 12,600 jobs, with 73% located in the Western Cape, excluding indirect employment through suppliers, logistics and storage.

Grain SA warned that declining domestic output could leave consumers facing annual additional costs of up to US$ 34.7 million to maintain bread quality if imports dominate the market.

The organisation outlined several priority interventions to stabilise the sector.

These include modernising the import tariff system through a revised reference price and automated trigger mechanism, limiting imports during local harvest windows to avoid market distortion, and supporting greater adoption of new breeding technologies to enhance productivity and yield stability.

Additional proposals include strengthening producer risk-management tools such as subsidised crop insurance and reforming location differentials on the South African Futures Exchange (SAFEX).

Finally, the industry is calling for restored transport and logistics efficiency to curb rising costs carried by farmers and consumers. Krige warned that the window for intervention is narrowing.

“Without decisive and coordinated intervention from government and the full value chain, the wheat industry faces a real threat to its survival. If producers fall, the whole chain falls, and ultimately consumers and rural economies pay the price,” he said.

Tags: prices, Production, wheat, South Africa, imports, costs, tariff