Original Research
The competitive status of the South African Wheat Industry
Journal of Economic and Financial Sciences | Vol 9, No 3 | a63 |
DOI: https://doi.org/10.4102/jef.v9i3.63
| © 2016 Johannes van der Merwe, Philippus Cloete, Herman van Schalkwyk
| This work is licensed under CC Attribution 4.0
Submitted: 18 December 2017 | Published: 03 December 2016
Submitted: 18 December 2017 | Published: 03 December 2016
About the author(s)
Johannes van der Merwe, School of Economics, North-West University, South AfricaPhilippus Cloete, School of Economics, North-West University, South Africa
Herman van Schalkwyk, North-West University, South Africa
Full Text:
PDF (822KB)Abstract
This article investigates the competitiveness of the South African wheat industry and compares it to its major trade partners. Since 1997, the wheat-to-bread value chain has been characterised by concentration of ownership and regulation. This led to concerns that the local wheat market is losing international competitiveness. The competitive status of the wheat industry, and its sub-sectors, is determined through the estimation of the relative trade advantage (RTA). The results revealed declining competitiveness of local wheat producers. Compared to the major global wheat producers, such as Argentina, Australia, Brazil, Canada, Germany and the USA, South Africa’s unprocessed wheat industry is uncompetitive. At the same time, South Africa has a competitive advantage in semi-processed wheat, especially wheat flour. The institutional environment enables the importation of raw wheat at lower prices and exports processed wheat flour competitively to the rest of Africa.
Keywords
Wheat industry; competitiveness; competitive advantage; revealed competitive advantage (RCA); relative trade advantage (RTA) index; relative export advantage (RXA); relative import advantage (RMA); market concentration; agriculture; South Africa
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