RESTRICTED
WORLD TRADE G/STR/Q1/ZAF/3
4July1996
ORGANIZATION(96-2556)
Original: English Working Party onState Trading Enterprises
REPLIES TOQUESTIONS FROM THE UNITED STATES1
ONTHE ARTICLE XVII NOTIFICATION OFSOUTH AFRICA2
Thefollowing communication, dated 18June1996, hasbeenreceived from thePermanent
Mission ofSouth Africa.
_______________
Could South Africa elaborate onitsstatements under Description oftheFunctioning oftheState
Trading Enterprises, part3ofthe1960 Questionnaire forthefollowing statements:
1. Handling ofImports: "Thefollowing boards, withtheapproval oftheMinister ofAgriculture
havethesolerighttoissue permits tothetrade fortheimportation ofthecommodities listed below:
(wheat, maize, lucerne seedandsorghum)".
Could South Africa explain howthese Boards engage intrade, suchashowtheydetermine
whoiseligible forimport permits, howthequantity ofimports isdetermined, ifanyfeesarecharged,
andhowimport prices compare todomestic prices?
Theliberalization ofSouth Africa 'sagricultural marketing system hasbeensoextensive in
thelasttwoyears thatsome ofyourquestions maynolonger berelevant. Weintend providing afull
andnewnotification totheWTO soon. Nevertheless, thefollowing isappropriate atpresent:
1. Handling ofimports:
Quantitative import control hasbeenreplaced withimport duties. Therefore import permits
arenolonger issued bytherelevant boards formaize, wheat, lucerne seedandsorghum. Theapproved
rateofdutyonthese products is:
maize 0%
wheat 0%
lucerne seed 0%
sorghum 3%
2. Handling ofExports:
"(a)Thefollowing Boards undertake exports fortheirownaccount: (oilseeds, maize, wheat)".
1G/STR/Q1/ZAF/2.
2G/STR/N/1/ZAF.G/STR/Q1/ZAF/3
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"(b)Thefollowing Boards undertake exports onbehalf ofproducers: (citrus, deciduous fruit,
anddried fruit)".
"(c)Thefollowing Boards selltocommercial firmswhich export fortheirownaccount: (maize,
oilseeds, lucerne seeds, wheat, meat, sorghum)".
"Buying andselling ofcommodities areregulated onlyuptoacertain point (e.g.inrespect
ofwheat theBoard determines selling prices; ...)".
Could South Africa explain howthese Boards engage intrade, howprices paidtoproducers
aredetermined, howthese prices relate todomestic prices, howthedecision todealwithcommercial
firmsismade (forBoards thatselltocommercial firmswhich export fortheirownaccount), howexport
prices aredetermined andwhat"regulated onlyuptoacertain point" means forallcommodities?
TheMaizeBoardadministersasinglechannelexportpoolsystem.Whenaparticipantvoluntarily
delivers maize totheexport pooltheBoard makes aconservative advance payment tohimbased upon
theexpected export realization plusacontribution fromtheStabilization Fund minus expected export
costs -alldetermined prior tothecommencement ofthepool. Once thepoolhasbeencompleted a
finalpayment, ifappropriate, ismade toallparticipants. TheBoard itself dosnotexport butoffers
maize ontender forexport byprivate firms fortheirownaccount. Thissystem iscurrently alsounder
review withthepossibility offurther liberalization.
South Africa hasnotexported significant quantities ofwheat inrecent years butsmall amounts
havebeenexported byprivate firms under permits issued automatically bytheWheat Board. The
Wheat Board, through itsappointed agents, isthesolepurchaser ofwheat from domestic producers.
Producers arepaidapricewhich iscalculated fromthedomestic selling price. Thelatter isestablished
innegotiations between producers andmillers andiscurrently below import parity.
While theMeat Board isauthorized tooperate asurplus removal scheme, itcurrently does
notandistherefore notinvolved withexports other thanautomatically licensing exports forstatistical
purposes.
TheSorghum Board doesnotlimit theexportation ofsorghum. Sorghum isexported by
individual traders orbytheSorghum Board. Producers cansellsorghum onavoluntary basis tothe
Sorghum Board. Ondelivery totheBoard, anadvance ispaidtotheproducers based ontheexpected
realization ofthepool. After exportation ofthesorghum, apayment ismade toparticipants depending
ontheproceeds ofthepool.
TheLucerne SeedBoard operates asurplus removal scheme. Private traders canimport and
export freely. Ifdelivered totheBoard, theBoard maysellthelucerne seedonthelocalmarket or
export it.
TheOilseed Board administers avoluntary surplus removal scheme. Imports andexports are
undertaken bythetrade. Oilseeds delivered totheBoard arehandled asapool. Products delivered
tothepoolareexported bytheBoard inconsultation withthetrade. Producers whodeliver tothe
Board receive anadvance andfinalpayment based respectively onexpected andfinalrealization of
thepool.
TheCitrus Board andDeciduous FruitBoard operate single channel export poolsystems. All
citrus exported should bedelivered totheBoard. Theboards haveappointed agents which export the
citrus fruitontheirbehalf. Permits arealsoissued toexporters whorequest toexport outside ofthe
poolsystem. Ondelivery tothepool, producers arepaidanadvance based ontheexpected realizationG/STR/Q1/ZAF/3
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ofthepool. After exportation ofthefruittheboards distribute thenetproceeds ofeachpooltothe
participants inproportion tothequantities offruitdelivered tothepool.
TheDried Fruit Board appoints agents whoexport prunes anddried vinefruitonbehalf of
theBoard. Theexport prices aredetermined bytheagent depending onrequirements intheinternational
markets. Surpluses aftersupplying thelocal market areexported. Allfruitdelivered totheBoard
ishandled inapool. Producers arepaidanadvance based ontheexpected realization ofthepool.
"Regulatedonlyuptoacertainpoint".Thismeansnotallcommoditieswereinthepastregulated
inthesame waye.g.some hadfixed selling prices andsingle channel marketing, while onothers the
intervention wasinsignificant. Itcanbementioned thatduetoliberalization intheSouth African
domestic market itisonlyinthecaseofwheat thatselling prices stillremain fixed while inmostother
cases where anyform ofmarket intervention wasapplied ithasbeenreduced.
3. Determination ofQuantities Exported orImported:
"Thequantities aredetermined bythevolume ofproduction andmarket forces. ...Forother
commodities, such asmaize, groundnuts, certain types ofleaftobacco anddried fruits,
productionisalsonormallyinexcessofdomesticrequirements.Occasionalsurplusesofproducts
suchaswheat arealsoexported. Where import tariffs arenotyetinplace, theimports ofthe
regulated commodities aredetermined onthebasis ofestimated domestic requirements."
Could South Africa explain thecriteria usedfordetermining ifasurplus ordeficit exists in
anygiven yearsoastorequire importing orexporting?
With regard totheimportation ofcommodities previously regulated byBoards, quantitative
import control hasbeenlifted andimporters arefreetoimport subject tothepayment oftheapplicable
tariffs. Inthecaseofcitrus anddeciduous fruit, where asingle channel export scheme operates, certain
counts andvarieties offruitarespecifically produced fortheexport market. Inthecaseofdried fruit,
surpluses aftersupplying thelocalmarket areexported. Thequantity ofwheat exported isdetermined
bytaking intoaccount thequantity delivered, domestic needs aswellasabuffer stock oftwomonths
milling needs. With regard toother Boards, thequantities available forexport aredependant onthe
voluntary quantities delivered totheBoard.
4. Export Prices:
"Any products exported aresoldatprices ruling ontheexport markets."
Could South Africa explain howexport prices areset,andhowtheyrelate todomestic prices
andprices paidtoproducers?
Products aresoldatthebestpossible price thatcanberealized onexport markets.
5. Statistical Information:
Could South Africa provide information broken down byenterprise andprivate trade?
Statistics broken down byenterprises andprivate tradeareunfortunately notreadily available.