Morocco introduces subsidies to support import of up to 2.5MMT of soft wheat
MOROCCO – Morocco’s government has introduced a subsidy for the import of 2.5 million metric tonnes of soft wheat to bolster local supply which has dwindled due to a relentless drought that has plagued the country.
According to Morocco News, the National Interprofessional Office of Cereals and Legumes (ONICL) released a circular providing that the subsidy program will support importers monthly covering the difference between the cost of wheat and the reference import price of MAD 270 (US$27) per quintal.
According to the circular, between July 1 and September 30, 2023, subsidies will be granted to facilitate the import of considerate quantities of milling wheat, which can reach up to 2.5 million metric tons.
Morocco is a major cereal importer, ranked as the largest importer of wheat from the EU for the 2022/2023 agricultural campaign, according to the European Commission.
The program will primarily benefit people who seek to import wheat from Russia, Ukraine, France, Germany, Argentina, and the US.
However, according to traders, the move is an attempt to facilitate imports of cheaper Black Sea grain, though nearer western European suppliers led by France have a shipping advantage.
Some point out that Western European suppliers, notably France, have a geographical advantage in terms of proximity, which could, however, influence their choices.
This comes amid concerns about insufficient wheat production in the agricultural season of 2022-2023 due to adverse climate conditions such as drought.
In April, Morocco’s Agriculture Ministry reassured citizens that cereal production is expected to rise by 62% in 2023 compared to the previous season.
The ministry attributed the surge in production to an improvement in weather conditions compared to the agricultural campaign for 2022.
In 2022, the country suffered its worst drought in decades leading to a decline in cereal production by 60% to mark the largest decrease in the North African region.
However, for the 2022/2023 agriculture campaign, the Ministry projected that cereal production is expected to reach approximately 55.1 million quintals, up from 34 34 million quintals in the previous agriculture campaign, with soft wheat accounting for 29.8 million quintals.
Meanwhile, durum wheat is set to reach 11.8 million quintals, and barley 13.5 million quintals.
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