Grain chairperson Neels Ferreira said it’s disturbing that Safex wheat prices trade at up to R200/t below import parity prices for Argentinian wheat and up to R350/t below import parity for US hard red wheat, despite the huge disparity between locally produced wheat and demand.
W heat production for the 2006/07 marketing season is estimated at 2,169 million tons by the Crop Estimates Committee. About 800 000 tons of wheat will need to be imported to meet the shortfall of local production. “Imports will have to be monitored and a solution for the quality pricing of locally produced wheat still needs to be found,” he said. “Alternatively, wheat producers would have to establish a different dispensation for cultivar release, which will place more emphasis on yield, disease and pest resistance and better general adaptability and less emphasis should be put on quality traits, which cause a genetic bottleneck.”
However, Hermanus Kitshoff, a delegate from the Western Cape, warned that wheat producers should maintain the high quality of wheat they produce at all costs. “Argentinians are aware of the criticism of the quality of their wheat and they are investing huge amounts of money to improve their cultivars. If we reduce the quality of our produce, we might find ourselves in a situation where the Argentinian wheat is of a better quality than ours and we could then ultimately lose our market,” he said.
Meanwhile, cheap imports of vegetable oils and oilcake due to relatively low international prices and the rand’s robustness over the past year have squeezed profit margins in the oilseed industry. Grain chairperson Neels Ferreira said prices for both sunflower seeds and soya are trading well below import parity despite a reasonable balance between supply and demand. The profitability of the groundnut industry has also come into question and has seen large scaling-down due to the rand’s strength.