South Africa’s wheat sector, which is a backbone of the country’s bread supply and
rural employment, is showing deep distress signals. Recent warnings from Grain SA
that the industry is at a breaking point are not mere rhetoric.
The industry’s own numbers, plus government and market datasets, show production that relies heavily on imports, margins squeezed by rising input costs, and a policy gap that leaves producers exposed.
Domestic commercial wheat production for the 2023-2024 season was reported at
roughly 2.05 million tonnes (3% lower than previous season), with an average yield
of 3.81 tonnes per hectare (ha) across about 537,950 ha.
Yet South Africa processed roughly 3.44 million tonnes that year, according to the Southern African Grain Laboratory NPC.
Domestic supply gap
Meaning imports routinely supplement almost 50% of domestic demand, highlighting a domestic supply gap.
That import dependency has persisted over the years. Grain Labs SA’s market
analysis shows imports in recent years increasing to 1.9 million tonne range (a
15% increase from the previous season). Most wheat imports are shipped from
Poland, Russia and Australia.
This supply gap exposure matters. And it’s because of price and cost dynamics experienced
by local wheat farmers. Grain SA’s recent analysis estimates production costs near
$865 per hectare. It requires break-even yields of about 3.4 tonnes per ha for viability.
With Western Cape yields in some places tracking below that break-even point this
season, many producers face operating losses unless market conditions change.
The Western Cape, which produces more than 60% of South Africa’s wheat, has
experienced increasingly erratic rainfall and hotter spring temperatures. Both of
these suppress yields and increase production volatility.
Studies by the Agricultural Research Council (ARC) show that projected warming of 1.5-2°C could reduce dryland wheat yields by 10-20% without adaptive practices. Meanwhile global market conditions and policy timing worsen the price squeeze.
SA’s import tariff settings
Global wheat supplies have been ample in 2024-2025, keeping international
reference prices lower. However, South Africa’s import tariff settings have not
adjusted to this movement. Grain SA and SACOTA submitted requests to the
International Trade Administration Commission (ITAC) in June 2024. This to adjust import
reference prices and automate tariff triggers. But decisions are still pending.
This leaves cheaper imported wheat to continues to pressure local prices. While
domestic input costs (fertiliser, fuel, seed, labour) remain high. The Southern African
Grain Laboratory NPC and Grain SA’s public statements place this tariff-decision
delay at the centre of the sector’s near-term crisis.
“Local producers cannot compete with highly subsidised wheat imports. Especially when those imports arrive during our harvest,” says Richard Krige, Chairperson, Grain SA.
“Every delay tightens the pressure on farmers, who are already stretched to breaking point.”
Wheat value chain
The wheat value chain supports around 12, 600 direct jobs, with 73% in the Western
Cape. This according to Grain SA. A sustained contraction in domestic plantings would
ripple through milling, logistics and rural economies. At the consumer end, Grain SA
notes that raw wheat costs contribute only 18% to retail bread prices. However, the
social and regional employment impacts would be severe.
“Bread is a staple food for millions of South Africans. Yet few realise that the farmers producing this essential crop are under immense pressure,” added Richard Krige, Grain SA chairperson. Food security risk is not just about national availability. It’s about resilience and local capacity. A durable decline in domestic production would increase import dependence and reduce the sector’s ability to respond to global shocks.
On the other hand, farmer livelihoods and rural socio-economic stability are at stake. This is because continued negative margins threaten generational farms and the associated social capital.
Research-based remedies
Agribusiness research analysing the market dynamics of the South African wheat
industry. Done by Chief Economist, Wandile Sihlobo, it points toward concrete remedies that would align with environmental, social and governance priorities.
Firstly, a prompt transparent tariff review mechanisms tied to global reference prices (to avoid ad-hoc shocks). Secondly, targeted support for agronomic practices and yield improvement (investment in breeding, extension and finance to lift average yields above the breakeven threshold). Lastly, value-chain coordination that protects local milling
while limiting consumer price shocks.
South Africa’s wheat sector is a test of industrial policy, rural resilience and food
security. The numbers make it clear why Grain SA’s alarm should be treated as an
evidence-based call to action.
If policymakers, value-chain players and investors don’t treat these signals seriously, the country risks losing a significant element of its domestic wheat capacity and the social and environmental benefits that go with it.
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