Trade aspects to remain a key focus in local wheat market

• Trade aspects remain an important factor in the market as South Africa is a net importer of wheat (see Chart below). The wheat import tariff has triggered again on 10 April 2018 to R437 per tonne. The previous trigger was on 20 March 2018, which then, was calculated at R293.74 per tonne, after an uptick in international wheat prices (No2 HRW), which were supported by unfavourable weather conditions in the US wheat growing regions.
• However, these rates are not yet applicable. The current import tariff is R394.85 per tonnes. The newly calculated rates will be applicable after publication in a government gazette, of which the timeframe is unclear. The import tariff will expectedly decline to R293.74 per tonne first and then increase to R437.25 per tonne.
• As indicated in yesterday’s note, there were no wheat imports last week. The last imports were in the week of 16 March 2018, recorded at 25 135 tonnes. This placed 2017/18 marketing year’s wheat imports at 1.2 million tonnes, which equates to 63 percent of the seasonal import forecast of 1.9 million tonnes.

Chart: South Africa’s wheat imports as a share of local (wheat) consumption

Source: SAGIS, SASDE, Agbiz Research

Read the full report by Wandile Sihlobo in the attachment below:

Agbiz Morning Market Viewpoint on Agri-Commodities 19 April 2018