A new 20% import tax on foreign peanut butter is taking effect, sparking a fierce debate over South Africa’s food security and consumer costs.
Designed to shield struggling local processors and farmers from cheap imports, the tariff levels the playing field, but it comes at a high price for cash-strapped households.
As everyday food budgets tighten, South Africans are left asking whether taxing an essential pantry staple is the best way to protect domestic industry.
The higher duty, implemented in July 2026, followed an investigation by the International Trade Administration Commission of South Africa (ITAC) into the conditions facing the local peanut butter industry.
The commission said imports had risen sharply while local manufacturers faced declining production and sales, underused factory capacity and rising costs.
The tariff change also aimed to correct what ITAC described as an imbalance in the groundnut value chain.
A tariff imbalance
Before the change, raw groundnuts imported for local processing attracted a 10% ad valorem duty. At the same time, imported roasted groundnuts and finished peanut butter faced much lower duties.
ITAC said this created an incentive to import finished peanut butter rather than manufacture it locally.
“ITAC recommended increasing the general customs duty on peanut butter from 0.99c/kg to 20% ad valorem,” the commission said.
“The application was, inter alia, to correct a tariff anomaly in the groundnut value chain. Raw groundnuts attracted a 10% ad valorem duty, while imported roasted groundnuts and finished peanut butter attracted a negligible duty.
"This structure favoured the importation of finished products over domestic processing and manufacturing.”
The commission said its investigation found that the Southern African Customs Union peanut butter industry had experienced declining production and sales volumes, underutilised manufacturing capacity, rising input, labour and overhead costs, weakened profitability and significant price disadvantages against imported products.
Peanut butter imports also increased sharply in 2024, with importers gaining market share while parts of the domestic industry lost ground.
The new duty is therefore intended to improve the competitiveness of local manufacturers and encourage greater use of existing production capacity.
The new tariff came into effect through Government Gazette No. 55065, Notice No. R.7739, dated July 24, 2026.
But what happens to the price?
The policy comes with an obvious concern for shoppers.
Peanut butter is widely regarded as an affordable source of protein and is particularly important to lower-income households. ITAC said it considered the potential impact of the tariff on domestic prices, import volumes, supply and demand and consumer spending across income groups.
The commission said the applicant had initially requested a 25% ad valorem duty. However, its assessment found that this could place undue pressure on vulnerable households.
ITAC therefore recommended a 20% duty as a compromise between supporting local industry and protecting food affordability.
“ITAC is mindful that peanut butter is an important staple and a relatively affordable source of protein, particularly for lower-income households,” the commission said.
“The assessment found that the 25% ad valorem duty originally requested by the applicant would place undue pressure on vulnerable households. ITAC accordingly recommended a more moderate rate of 20% ad valorem to balance support for domestic production with food affordability.”
The commission also said it would investigate a possible temporary rebate on imported groundnuts used by local processors. Such a measure could lower input costs for manufacturers and help limit pressure on consumer prices.
The groundnut gap
South Africa’s own groundnut figures show why the issue extends beyond peanut butter.
The Department of Agriculture said South Africa had approximately 48,000 hectares planted with groundnuts in 2025 and produced around 72,000 tonnes. The gross value of production was approximately R549.86 million.
Yet the country imported more groundnuts than it exported.
“South Africa exported groundnuts worth approximately R527.96 million in 2025, while imports were valued at around R710.51 million,” the Department said.
“This resulted in a negative trade balance of approximately R182.55 million, meaning South Africa imported more groundnuts than it exported.”
The figures tell a different story once groundnuts are processed.
South Africa exported approximately R576 million worth of prepared or preserved groundnuts, which includes products such as peanut butter, in 2025. Imports were valued at around R267 million, giving the country a trade surplus of approximately R309 million.
“However, the picture changes when it comes to processed groundnuts, including peanut butter,” the Department said.
Consumers have their say
The policy has also prompted frustration among some consumers who question why South Africa needs to import products linked to a crop that is already produced locally.
One consumer said they were pleased that local suppliers were available.
Another questioned why South Africa imports products that could be produced locally, while pointing to the rising price of peanut butter.
“Why are we as South Africa importing such, man? Nee dit maak nie sin nie. We have the best of the best, and we export that, yet want to import and pump up prices on things like peanut butter. But nah, I lost my cool last week when I saw a small tub of Yum Yum close to R60,” they said.
Another consumer raised a broader concern about the price of locally produced food compared with imported alternatives.
“Really, guys ... are we doing this? They must then ask why olive oil made in South Africa costs the same as imported oils,” they said.
lutho.pasiya@nationalmg.co.za