The 34% wheat import duty increase would not affect the price of bread, farmers’ association Grain SA announced on Monday.
Following the Finance Ministry’s announcement on Friday that it had approved a tariff increase on wheat imports – from R911.2/t to R1 224.31/t – there were concerns about the impact this would have on the price of bread and other staple food.
However, Grain SA explained that the the price of bread would not be impacted by the latest increase, as the price of bread should have decreased in December 2015, following the lower international price of wheat. However, the price actually increased over this time, according to a Stats SA bread price survey.
Following a delay in the announcement by National Treasury stipulating that the international price of wheat was down, wheat importers benefited, earning R313/t on 608 126 tons, or R190-million, during this time.
Therefore, once the 34% increase in the tariff on wheat imports, which was supposed to be in place since December, was announced, the benefit that importers enjoyed would be removed, explained Grain SA CEO Jannie de Villiers.
He added that the wheat price was only 18% of the bread price and was sometimes used as an excuse to increase the price of bread.