• After maize, wheat is the second most produced food worldwide (rice is third).
  • Wheat is mainly used for human consumption. It can also be used as seed and as animal feed.
  • The grain is a staple food from which bread, biscuits, cake, cereal, pasta, noodles and couscous can be made. It is used for fermentation to make beer, alcohol and vodka (its alcohol can also be used for biofuel).
  • Other non-food uses include the production of absorbing agents for disposable diapers, cosmetics, adhesives and industrial uses such as starch on coatings.
  • The straw can be used as fodder for livestock or as a construction material for roofing thatch. To a limited extent, wheat is planted as a forage crop.
Source: A Profile of the Wheat Market Value Chain (see "Websites & publications" heading)

International business environment

  • The top producers of wheat are EU, China, India, Russia, Canada and Ukraine (USDA, 2021).
  • The top exporters of wheat, flour and products is the Russia, Canada, Australia, Ukraine and Argentina (USDA, 2021).
  • The top importers are Egypt, Indonesia, Turkey, China and Algeria (USDA, 2021).
  • South Africa remains the largest wheat producer in Sub-Saharan Africa after Ethiopia.

 

Further reading:

 

South Africa: imports and exports

  • Poland, Russia, Germany, Lithuania, Ukraine, USA and Latvia are the top suppliers of wheat to South Africa (SAGIS, 2020).
  • South Africa also exports wheat to nearby countries in the Southern Africa region and acts as a conduit for grain imported from outside the region (USDA, 2020).
  • The support provided to domestic producers has declined in recent years, firstly through the reduction in the reference price that triggers the variable import tariff from 294 USD per tonne to 279 USD per tonne in mid-2017. Support was further eroded by the introduction of the quota of 300 thousand tonnes that can be imported free of this duty from the European Union under the Economic Partnership Agreement (EPA) (BFAP, 2020).

Local business environment

Wheat is planted mainly between mid-April and mid-June in the winter rainfall area (Western Cape) and between mid-May and the end of July in the summer rainfall area (eastern Free State).

The wheat marketing season in South Africa commences on 1 October and ends on 30 September the following year. In a bid to protect the local industry, tariffs on imported wheat apply (see “South Africa: imports and exports” under the previous heading).

Because imports make up half of South Africa’s wheat requirements, the price farmers get for their crop is tied to import parity (and so exchange rate and world price levels play a crucial role).

Note from USDA report “South African Wheat Prices Reach Record High Levels” (2020, May 21):

  • The South African Rand depreciated by 25 percent since January 2020 due to COVID-19 and Moody’s downgrade of South Africa’s credit rating to junk status, driving local wheat prices to record levels. Record high wheat prices have a negative inflationary impact on bread and wheat flour prices, and increase the South African consumers’ expenditure on basic food products

Note from USDA report “South Africa Could See a 20 Percent Drop in Wheat Imports in the Next Marketing Year on Increased Production” (2020, September 23):

Due to an expected sharp increase in local wheat production on favorable weather conditions and record yields, South Africa’s imports of wheat and wheaten products in the 2020/21 marketing year (MY) is expected to drop by 20 percent. South Africa could import around 1.6 million tons of wheat and wheaten products, down 400 000 tons from the expected 2.0 million tons of wheat and wheaten products imported in the 2019/20 MY.

Notes from the 2020-2029 BFAP Baseline

  • Having stabilised in recent years, the area planted to wheat is projected to increase in the short term, supported by high 2020 prices and the above mentioned uncertainty in the barley sector. This increase is attributed to the Western Cape, as wheat production in the Free State has progressively become less competitive and riskier compared to alternatives such as maize and soybeans.
  • Over the course of the next ten years, the wheat area in the Western Cape is projected to contract marginally, to reach approximately 310 000 hectares by 2029.
  • In the Free State, the area planted to wheat is projected to stabilise at around 100 000 hectares by 2029 – almost 20 percent of the national total.
  • Despite price support from the continued imposition of the variable import tariff and the persistently weaker exchange rate, further expansion faces strong competition for resources from a number of alternative crops such as pecan nuts.

 

Suggested reading:

  • Statistics (e.g. crop estimates, export/import etc) may be found on the Department of Agriculture, Land Reform and Rural Development (DALRRD) and South African Grain Information Service (SAGIS) websites, www.dalrrd.gov.za and www.sagis.org.za.
  • The annual Wheat Market Value Chain Profile on the DALRRD Directorate Marketing web pages at www.dalrrd.gov.za is a thorough investigation into the wheat value chain in South Africa.
  • Wheat crop reports can be found on the Southern Africa Grain Laboratory website, www.sagl.co.za.
  • Find the Grading Regulations for wheat and requirements for grain exports at http://agbizgrain.co.za.
  • Read the US Department of Agriculture Foreign Agricultural Service’s reports mentioned above on the internet.

For the newcomer

Find details of the Wheat production guideline document available from DALRRD and other grower notes under the “Websites & publications” heading. Under the same heading, read the ANA article (2019, November) about fifty-seven farmers’ successful participation in the Baphuduhucwana Production Incubator (BPI) scheme in North West province.

As a regular wheat importing country, South Africa and its wheat industry is fully integrated into the global wheat market which has become increasingly concentrated and sophisticated, and many variables need to be taken into consideration. Exchange rate fluctuations, for example, make it a challenge for even the most sophisticated farmers to plan effectively and to be profitable. SAFEX is a good tool to help hedge against exchange rate risk, but the minimum quantities required to trade on SAFEX make it less applicable for small emerging farmers. While transformation of the industry is important for its long-term sustainability in South Africa, this transformation has to happen in an economically viable way. It is not appropriate to encourage primarily subsistence level farmers to invest their scarce resources in what is at present a declining industry. It is almost certainly better to help the larger, more sophisticated emerging commercial farmers to enter the industry in a viable manner.

Source: adapted from a report commissioned by the Wheat Forum investigating the potential entry and successful participation of emerging black farmers into wheat production. Contact the Wheat Forum (details under "Role players" heading).

Agricultural Research Council’s Small Grains (ARC-SG) has a very active Farmer Support Programme, and they have many projects running with the emerging farmer in mind. It runs a three-day wheat production course, specifically for students and extension officers working with emerging farmers.

National strategy and government contact

  • International Trade Administration Commission of South Africa (ITAC) Tel: 012 394 3688 www.itac.org.za
  • National Agricultural Marketing Council (NAMC) Tel: 012 341 1115 www.namc.co.za

The Agricultural Policy Action Plan (APAP) 2015 – 2019 addressed the wheat industry. It noted the following:

  • Wheat has a low labour multiplier, and production costs are presently high.
  • The main contributing factor to the stagnation in wheat production and ever decreasing area put under wheat is the declining average gross income per hectare.
  • The main rationale for seeking to revive the wheat sector is to ensure less dependence on imports, which contributes to volatility in consumer prices and has hurt traditional wheat growing areas.
  • At the time, wheat farmers employed around 28 000 people. Supporting this sector could see a further 8 000 employed.
  • The number of wheat producers was estimated to be between 3 800 and 4 000, predominately white commercial farmers. There was space for transformation.
  • The Western Cape is the country’s greatest wheat producer, yet a lot of this wheat is transported to Gauteng and beyond, and so transport costs detract from the profitability of this crop. Reducing bulk transport costs by progressively increasing use of rail was also essential. A further intervention would be to increase milling capacity in the Western Cape.

Increasing the investment in new cultivars, particular as part of a conservation and uptake/adaptation of conservation agriculture was seen as another important way to reduce production costs.

The South African Cultivar & Technology Agency NPC (SACTA) was established in 2016 to administer the breeding and technology levy and will make payments to the seed companies from funds collected by means of the levies. This is to encourage more cultivars and greater investment in the market.

 

Proponents believe producers will gain from the SACTA measures because yields will be higher. There will be more locally produced wheat. Higher volumes of local wheat production will lead to less imports and thus less tariff payments, a counter to increased food inflation. Visit www.sactalevy.co.za.

Role players

 

Associations

  • Agbiz Grain Tel: 012 807 3002 http://agbizgrain.co.za/
  • Grain SA Tel: 0860 047 246 www.grainsa.co.za
  • SA Cereals & Oilseeds Trade Association (SACOTA) Tel: 012 663 9097 www.sacota.co.za
  • South African Chamber of Baking Tel: 012 663 1600 www.sacb.co.za
  • South African Cultivar & Technology Agency (SACTA) www.sactalevy.co.za
  • South African Grain Information Service (SAGIS) Tel: 012 941 2050 www.sagis.org.za
  • South African Grains Farmer Association (SAGRA) Tel: 012 111 9812 http://sagra.africa
  • The Wheat Forum is representative of major sectors involved in the wheat and wheat products industry, namely wheat producers, millers, bakers, trade unions, consumers and government that deal with policy issues of mutual concern. Call 012 007 1200.
  • Winter Cereal Trust Tel: 012 007 1200 www.wintercerealtrust.co.za

 

Training and research

The Winter Cereal Trust is responsible for the allocation of funding and appraisal of relevant research projects in the winter grain industry. Since 1998, statutory levies on sales of winter cereal have been imposed to finance the Winter Cereal Trust. The Agricultural Research Council’s Small Grains campus in Bethlehem conducts the research on wheat and other winter grains.

  • ARC-Small Grains (ARC-SG) Tel: 058 307 3400 Training is done on demand: should somebody be interested, the ARC-SG puts together a programme. In addition to training, the ARC-SG carries out a number of other services e.g. plant analysis, they run a wheat quality laboratory etc. Find details on www.arc.agric.za.
  • Grain SA Tel: 0860 047 246 www.grainsa.co.za Included in its Farmer Development Programme is a week long introduction to producing wheat.
  • Grain Training Institute Tel: 071 312 7413 www.gtinstitute.co.za
  • NOSA Agricultural Services Tel: 033 345 8990/9238 www.nosaagri.co.za Training and/or training materials
  • Southern African Grain Laboratory (SAGL) Tel: 012 807 4019 www.sagl.co.za
  • Stellenbosch University (i) Department of Agronomy Tel: 021 808 4803/5 www.sun.ac.za (ii) Department of Food Science Tel: 021 808 3578 www.sun.ac.za/foodsci
  • University of the Free State Department of Plant Sciences Tel: 051 401 2514 www.ufs.ac.za/plantsci

 

Companies involved

For an extensive list go to www.sagis.org.za – take the “List of Co-workers” and then “Wheat” menu options.

Websites and publications

Visit websites listed earlier on this page.

  • The ARC-SG has the following publications: (i) Wheat Diseases in South Africa (ii) Field guide for the identification of wheat insects in South Africa (iii) Guidelines for the production of small grains in the summer rainfall region (iv) Guidelines for the production of small grains in the winter rainfall region. The Guidelines for the production of small grains in the summer rainfall region and Guideline for the production of small grains in the winter rainfall region are highly comprehensive and essential publications. Topics include management of wheat production (e.g. reaching target yields), soil tillage guidelines, cultivar choice guidelines, fertilization guidelines, and weed and insect control. For the above publications, visit www.arc.agric.za or phone 058 307 3507.
  • Order online at www.arc.agric.za, call 012 842 4017 or send an email to stoltze [at] arc.agric.za for the following publications, available from the ARC Agricultural Engineering: Agro-processing of Cereal Crops Vol. 2 (Sorghum, wheat).
  • CD Roms from the ARC-PPR (Plant Protection Research) include: (i) Crop Pests, Vol. 4: Field Crops and Pastures Pastures  (ii) Medically Important Spiders And Scorpions Of Southern Africa. Write to booksales [at] arc.agric.za or infopri [at] arc.agric.za.
  • The AgriSETA Learner Guide Primary Agriculture “Harvesting agricultural crops” can be found at www.agriseta.co.za/downloads/LearningMaterial/116201_LG.pdf
  • Find the Pannar Wheat Production Guide at www.pannar.com.
  • Find the latest annual A Profile of the Wheat Market Value Chain under “Annual publications” on the web pages of DALRRD‘s Directorate Marketing at www.dalrrd.gov.za. Also available on this website are the Technical Manual: Karnal Bunt of Wheat and Wheat production guidelines.
  • Find the wheat option at www.sagl.co.za, website of the Southern African Grain Laboratory (SAGL). Options cover national wheat crop and other reports.
  • Watch “Nasie in Gesprek besoek die koringbedryf” (June 2018) on YouTube.

 

Some articles

A Wheat Museum – “one of the only three of its kind in the world where the history of wheat is depicted” – can be visited in Morreesburg (Western Cape). Call 022 433 1093 or take a look at www.moorreesburgtourism.co.za/wheat-industry-museum/.

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