The duties have been increased on wheat and flour have increased as follows:
|Tariff code||Description||New duty||Old duty|
|1101.00.10||Brown wheaten meal produced by the milling of whole grains (the|
bran, germ and endosperm) (excluding separated wheat bran,
separated wheat germ or separated wheat semolina or endosperm)
|1101.00.20||Cake wheat flour as defined in Additional Note 1(a) to Chapter 11||28.76c/kg||Free|
|1101.00.30||White bread wheat flour as defined in Additional Note 1(a) to Chapter kg 11||28.76c/kg||Free|
The duty increase applies to all regions besides SADC, which remains duty-free.
The duties on wheat are automatically triggered based on the global price of wheat, so this increase is not the result of an investigation, but rather an outcome of the falling global price of wheat.
Impact of the increase
South Africa produces around 50% of the wheat we consume, which means each duty increase negatively impacts those consumers who can’t get access to the locally produced wheat.
The duty increase also doesn’t apply to the other SACU countries (Botswana, Lesotho, Eswatini and Namibia), which means any products made from wheat in the other SACU countries have duty-free access to the South African market, with the benefit of no duty on their raw materials.
Namibia has built a substantial pasta industry on this duty arbitrage, a position they have further entrenched with the anti-dumping duties recently imposed on imported pasta into the SACU region.
The duty increase doesn’t stop with wheat though. It also applies to flour made from wheat and here the same duty arbitrage exists, with the SACU countries not paying duty on the wheat, but being able to export the flour duty-free into South Africa. Lesotho has taken full advantage of this preferential position and completely dominates our imports of flour (90% of our flour imports) for the last year.
We don’t (yet) have either a wheat, pasta or flour masterplan, but watch this space. It would not suprise me if this did not make an appearance.