Grain SA Manager of Grain Economy and Marketing, Dirk Strydom, says the wheat tariff is in place to protect local producers and enable them to produce sustainably. He says if international wheat prices trade below a certain level, the tariff needs to be adjusted.

“Now there is a big formula that is used to calculate the tariff, but basically what the principle of a ‘trigger’ entails is that if the international price has traded at a $10 difference to the South African price for a period of three weeks then the ‘trigger point’ kicks in.

“So in other words a new tariff is calculated so as to create an equal playing field again.”

He says the new tariff has now been calculated and submitted to relevant government structures for approval. This could take about 28 days before the new tariff kicks in.

Commenting on questions around the cost to consumers, Strydom says experience has shown that the tariff does not impact consumers.

“A good example of that is three months ago when the import tariff was not in place. Government held it back to make sure that the consumer would not be affected.

“In that three month period the bread price did not drop.”

Strydom adds that the price of wheat also only makes a very small impact on the price of bread. He says wheat’s share of a loaf of bread is only about four slices, or 20%.