Morocco lifts import duties on wheat to build up stock following low production

MOROCCO – The Government of Morocco has extended the suspension of import duties on common wheat and products until May 31, 2021 in a bid to keep the cost of imports at a competitive level and build stocks.

The North African country is facing historically low wheat production due to low rainfall which has made the government turn to imports to ensure supply of the commodity.

The country’s cereal production for the 2019-2020 season decreased by 39% compared to the previous season reaching 3.2 million tonnes, according to a report by the Ministry of Agriculture.

Soft wheat cereal production reached 1.7 million tonnes, while durum wheat amounted to 790,000 tonnes and barley production reached 640,000 tonnes.

The season’s production was also down by 57% compared to an average year under the ministry’s signature Green Morocco Plan.

According to the report, the area put under production during the season under review was 4.34 million hectares.

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Morocco’s cereal production for the 2019-2020 season decreased by 39% from previous season reaching 3.2 million tonnes

In August 2020, Morocco’s National Ports Agency (ANP) announced that the country’s imports of cereals reached 5.9 million tonnes during the first seven months of the year, a 49.8% rise from the same period last year.

The 2020/2021 wheat and barley season started in late October – early November.

As of January 10, 2020, according to a GAIN report by USDA, the total area planted to cereals for common wheat, durum and barley is estimated by the industry at 4.2 million hectares.

In an earlier update, USDA forecasted 2020/21 production to be 2.05 MMT for common wheat, 0.82 MMT for durum wheat, and 0.95 MMT for barley.

The report expects wheat imports to rise sharply to 5.4 MMT, about 20 percent higher than the ten-year average.

In term of consumption, wheat is forecasted to slightly increase to 10.850 MMT based on steady per capita consumption and the assumption of typical population growth. Barley consumption to increase to 2.5 MMT based on below average vegetative growth for grazing in MY 2020/21.

Prior to the recent extension of duty-free wheat, the government had extended its suspension of custom duties on common wheat until Dec. 31, 2020.

The state also set several other measures in place to help producers market their harvest for the 2019-20 year, including a fixed reference price for common wheat at US$280 per tonne.

In addition, they provided biweekly storage premium for grain traders and Moroccan ag cooperatives and also a subsidy for millers and common wheat buyers at the rate of US$5 per tonne.

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