2016-17 has been a poor year for Moroccan grain production. The International Grains Council (IGC) put its total crop at 3.6 million tonnes, compared with 11.7 million in 2015-16. The wheat crop is put at 2.7 million tonnes, down from 8.1 million. Barley production, in contrast, is unchanged at 2.4 million tonnes.
Morocco is also a producer of durum wheat, with the crop at 900,000 tonnes in 2016-17, down from 2.4 million the year before.
According to the IGC, Morocco will import a total of 8 million tonnes of grain in 2016-17, up from 7.3 million in 2015-16. Wheat imports are forecast at 4.7 million tonnes, up from 4.3 million. Maize imports are seen unchanged at 2.1 million tonnes. Barley imports are put at 1.2 million tonnes in 2016-17, up from 800,000 a year earlier. Morocco is also forecast to import 850,000 tonnes of durum wheat, up from 810,000 in 2015-16.
The IGC forecasts better conditions for the 2017-18 crop.
“Conditions across North Africa’s winter grain areas are much improved compared to last year, particularly in Morocco, with drought mostly alleviated by widespread rains,” it said, forecasting a 42.9% increase in harvested area, from 2.1 million to 3 million tonnes.
In September, an attaché report described the Moroccan government’s actions to deal with the lower crop and what had caused it.
“In an effort to head off rising wheat prices and avoid possible shortages, the Government of Morocco (GOM) lowered import tariff on common wheat from 75% to 30% in late 2015,” the report said. “This move served to keep domestic prices at around 2,588 MAD ($263) per tonne. In order to secure adequate wheat supply, while at the same time keeping imports in check, Morocco has increased import tariffs to 65%, as of June 15, 2016. This move aims to safeguard local industry and keep consumer prices unchanged. In an effort to encourage local wheat production and increase local supply, the GOM has also been working to increase the quantity of land under irrigation as well as expanding access to crop insurance among farmers, and preserving seeds that will be provided to farmers for the next growing season.”
The attaché took a broader view in an annual report published earlier in the year.
“Grain production continues to depend heavily on rainfall because most of the production is rainfed,” the attaché said. “Moroccan rainfall is known for its wide fluctuations and has recorded extreme variations in recent years with no clear trends. These fluctuations considerably impact forage and grain supplies and ultimately the Moroccan economy.”
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High wheat consumption
“In the past decade, consumption has been driven by rising population coupled with diversification of bread products,” the report said. “This is especially the case in major cities where the higher income population tends to concentrate. Common (bread) wheat is a politically and socially sensitive commodity in Morocco.”
The government devised a mechanism by which bread wheat prices have been successfully maintained at low levels, and the government has supported the difference in costs, it explained.
“The Moroccan government continues to subsidize more than 1 million tonnes of common wheat flour commonly known as ‘national flour,’ presumably to make flour available to the low-income consumers,” the report said. “The distribution of the subsidized flour is subject to heavy government control at all levels. The government has set up all processing parameters, including the extraction rate, extraction margin, ex-mill prices, wholesale and retail prices. The wheat (whether local or imported through the national cereal office’s tenders) enters flour mills at the same price ($260/tonne) for the standard quality and the government supports the difference. The government, however, does not get involved in marketing and pricing of durum wheat in the local markets.”
There are an estimated 154 common wheat industrial processing mills in Morocco with a collective milling capacity of 10.5 million tonnes. About 34 are durum wheat mills with an overall capacity of 1.16 million tonnes, and 12 are barley mills with a total capacity of about 300,000 tonnes, the report said.
“In addition, there are literally thousands of traditional small family-run wheat processing mills located mostly in small towns and rural areas,” the report noted. “The wheat mills’ capacity is generally underutilized, which has opened an opportunity for the wheat millers to process wheat for exports, especially to African countries. U.S. wheat is viewed by many Moroccan millers as an ‘enhancer’ of flour performances, and hence some quality-oriented mills have been buying it.”
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U.K. wheat popular
“We’re hoping to hold a biscuit workshop in Morocco later this year,” she told World Grain.
“Morocco has been importing UKsh wheat on a regular basis in previous years,” she said, referring to the British export category. “Obviously if the U.K. is expensive they try to look for other sources, but it doesn’t work as well. Especially French biscuit wheat or Ukrainian biscuit wheat doesn’t really perform as well as U.K. The closest competitor is soft red winter, which is a good biscuit grade wheat. A lot of it is based on price after that.”
The market has become increasingly concentrated, with five companies responsible for about 70% of wheat imports for processing.
“The biggest one is the Gromic Group, and they’re the ones that import the largest amount, something like just over 1.4 million tonnes of wheat each year,” Cohen said. “Then you’ve got Millex Group.”
There is also Fandy Group and MayMouna.
She also explained the role of the national cereals office ONICL.
“ONICL basically is involved in subsidizing,” she said. “They make sure there is a stock of wheat. They make sure the country does not run out of wheat. If they want to put tariffs on anything, usually ONICL supports the Moroccan farmers. If they’ve had a good harvest they will put on tariffs, raise the import duty, making it hard for importers to bring wheat into the country so as to support the Moroccan farmers. Once the Moroccan farmers have sold all of their wheat they reduce the import tariffs and then they will make it easier for the importers.”
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Not in favor of biotech
The attaché also wrote a report last year on Morocco’s attitude to biotechnology.
“Morocco neither produces nor allows importation of agricultural products derived from biotechnology for human consumption,” the attaché said. “Notwithstanding, biotech commodities such as GE corn, soybeans and soybean meal may be imported for animal feed.
“Agricultural biotechnology is a politically sensitive topic in Morocco as many negative perceptions have spilled over from Europe, Morocco’s close neighbor and trading partner. Morocco’s heavy reliance on the E.U. market as the principal destination for its agricultural exports has instilled a reluctance among policy makers and producers to accept biotechnology products.”