JOHANNESBURG (Reuters) - South Africa’s finance ministry said on Friday it had approved a 34 percent increase in the tariff on wheat imports to 1,224.31 rand per tonne from 911.20 rand per tonne.
“The Ministry of Finance is particularly concerned about the impact of the higher import duty on wheat on the price of bread and other staple food, but also mindful of the need to ensure policy certainty, food security and the financial health of the farming industry,” it said in a statement.
Food prices especially for the staple maize crop have been accelerating because of a severe drought, pushing inflation higher, but analysts say the impact of the tariff hike on consumers will be minimal.
“A loaf of bread on average in South Africa costs 11.80 rand and the wheat component of that is 15 to 20 percent,” said Wandile Sihlobo, an economist at Grain SA, a producer group.
“The reason they are increasing it is because of the fall in global wheat prices and the depreciation of the rand. It levels the domestic price so that prices here do not fall to the levels where it is not sustainable to produce wheat in South Africa.”
Africa’s most industrialised economy typically imports about 60 percent of the wheat it consumes and Grain SA expects South Africa will import 2 million tonnes in the 2015/2016 marketing year which ends on September 30.
Wheat is a winter crop in South Africa and farmers will begin planting the grain soon.
Reporting by Ed Stoddard; Editing by James Macharia