An estimation of import demand function for wheat in South Africa: 1971-2007

Abstract

In the 1980s, South Africa was self-sufficient in the production of all important field crops, except rice. Currently, South Africa is a net importer of wheat, even though the country has managed to maintain average agricultural production above the population growth rate; some agricultural commodities are lacking and need to be imported. Using double logarithmic linear function and data obtained from secondary sources, this study investigated the determinants of import demand for wheat in South Africa, during the period 1971 to 2007. The estimated results of the model shows that income measured by the real gross domestic product per capita; the price of imported wheat; the price of sugar cane which is a complement for wheat; and the level of domestic wheat production are statistically significant in explaining the variation observed in the quantity of imported wheat during the period. Implications for policy are discussed.