XHANTI PAYI: Consumers will bear brunt of wheat tariff hike
SOMETHING peculiar happened in the South African economy last week, given the state of the agricultural and food sectors. The Treasury increased the duty on imported wheat from R1,224.31/tonne to R1591.40/tonne. This 30% increase in the levy took it to an all-time high.Given the recent dynamics of the wheat market, imports now constitute 60% of the wheat consumed in SA, according to estimates by the National Chamber of Milling. It says the import tariff now constitutes 38% of the wheat price, and the increase will be borne by the food-processing industry.This development would be comforting if the country was producing enough wheat that the food processing industry did not need to import any. But our farmers produce only 40% of the wheat we need.So, the industry choice seems simple: either scramble for local wheat, which will push up local prices since demand far exceeds local supply, or import and pay the new duty. One thing is for sure: the effect will ultimately be felt by the fi...
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