Reference Date: 2-June-2015
FOOD SECURITY SNAPSHOT
Above-average cereal harvest forecast in 2015 following timely and abundant rains
Despite below-average 2014 crop, wheat imports seen lower in just ending 2014/15 marketing year (July/June) due to high carryover stocks
Food inflation remains moderate
Above-average cereal harvest forecast in 2015
Harvesting of 2015 winter grains started in mid-May and will continue until mid-July. Being largely rainfed, cereal production in Morocco is highly variable. Favourable weather conditions with timely and locally abundant rains maintained good yield prospects. While in early May excessively hot weather prevailed in the region and threatened grain filling, winter crops in Morocco were generally unaffected by the heat as crops were already matured or approaching maturity. Beginning of the harvest coincided with a series of unseasonable showers and thunderstorms which hampered early harvesting.
The preliminary forecast indicates wheat production of 7 million tonnes, well above average, as well as, last year when dry conditions in autumn 2013 slowed down wheat planting and despite generally favourable weather conditions later in the season, yields were not sufficient to offset the area reduction. Total barley harvest, used mostly as feed, is forecast at 2.5 million tonnes, about 47 percent higher than last year and some 20 percent above the five‑year average.
As part of the Maroc Vert agricultural strategy, the Government continues to implement measures supporting cereal production. Measures include establishing a reference price for local wheat purchases, storage premium as well as subsidies for certified seeds, farm machinery purchases, irrigation equipment (ranging from 30 to 70 percent of cost) and soil testing to optimise fertiliser application.
Wheat imports expected to decrease in 2014/15 due to high carryover stocks
Morocco relies heavily on wheat imports from the international market to cover its consumption needs. Morocco’s cereal imports in 2014/15 (July/June) are forecast at 5.9 million tonnes, 9 percent down on 2013/14, of which wheat imports account for 3.3 million tonnes. EU and Black Sea countries supply most of the common (soft) wheat, while Canada is the traditional supplier of durum wheat. Lower import forecast is supported by higher carryover stocks, despite the below‑average 2014 harvest.
The Attijariwafa Bank, one of Morocco’s three major banks, signed a deal with Moroccan wheat trade federation to finance USD 300 million of Russian wheat imports in the 2014/15 season. Morocco typically imports from October to May (the start of the local harvest). However, wheat importers are seeking to establish a longer window for imports to take advantage of Black Sea exporters offloading large volumes at attractive prices at the start of the international marketing year in July.
In April 2015, the Government announced that the common wheat import tariff would be increased to 75 percent (from the current level of 17.5 percent) beginning from 1 May 2015.
Due to excess milling capacity in Morocco, limited quantities of wheat flour are exported to neighbouring countries.
Food inflation remains moderate
In April 2015 (the last data available), food inflation increased by 2.5 percent on yearly basis. In spite of the country’s high import dependency rate, the impact of the changes in international prices on domestic prices is mitigated by Government subsidies of more than 1 million tonnes of “national flour”, a common wheat of standard quality used to make flour for the low‑income consumers. The Government covers the difference between the actual price and guaranteed mill price. Durum wheat is not regulated.
The Government removed fuel subsidies in February 2014, narrowing the fiscal deficit from MAD 36.9 billion (USD 4.4 billion) in June 2013 to MAD 23.6 billion in June 2014. A reform of food subsidies remains unlikely.