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Significantly influenced by market reforms and trade liberalization, the Moroccan oilseed sector has experienced a substantial decline since the 1990s. With total annual growth in oil consumption predicted to be 2.6 percent, the oil and meal import bill is projected to climb 50 percent by 2025. To regain lost ground in this competitive market, Morocco will need to grapple with considerable challenges, ranging from production to processing.

In order to help policymakers and investors make informed decisions, FAO’s Investment Centre has recently published a review of Morocco’s oilseeds sector, which provides an analysis on consumption, production and processing, current market distortions, and a series of policy options for securing a viable future for the sector.  

Agriculture’s share of Morocco’s gross domestic product has contracted from 24 percent in 1965 to 14 percent in 2011. In this context, the domestic demand of agricultural products far outstretched domestic supply. The bilateral free trade agreement signed with the United States in 2006 has resulted in a sharp increase in agrifood imports to Morocco. Raw and agricultural products have accounted for roughly 10 percent of all imports in recent years, placing Morocco among the top 15 importers of agricultural products worldwide.

“The Moroccan oilseed sector currently faces a paradox,” remarked the study’s main author and FAO Economist, Nuno Santos, “though the government is intent on greater agricultural self-sufficiency, it has presided over a rapidly increased dependence on food imports to meet a rising domestic demand, which is highly responsive to income growth.”

The study provides a recent historical context for the Moroccan oilseed sector. The elimination of high guaranteed minimum prices in 1996 and internal market and trade liberalization programmes of the 2000s impacted oilseed production. Total oilseed production, which peaked at 170 000 tonnes in 1990, has declined to around 30 000 tonnes today and roughly half of current production is destined for direct food consumption as seeds. Meanwhile, oilseed imports increased from 10 000 to 20 000 tonnes in the early 1990s to an average of 375 000 tonnes over the last decade, with the bulk being soybeans imported from the United States.

 Even though total oil demand stalled at an annual rate of 0.2 percent between 2005 and 2011, meal demand for animal consumption continued to grow at 7.5 percent annually. If the production of meal from domestic crops remains stagnant at today’s level and the entire demand expansion has to be met via meal imports, the total oil import bill will climb 90 percent to USD 620 million by 2025. This would represent about 0.3 percent of the 2025 GDP forecast for Morocco.

The publication is intended to assist policymakers face challenges to the Moroccan oilseed sector and maximize its potential. The authors’ crop margin analysis suggests that sunflower for crushing generates broadly similar margins to that of fava beans and wheat grown as a monoculture crop. As such, sunflower would enjoy far better prospects if the latter two were not supported by domestic policies.

The report concludes by weighing a number of potential policy options for supporting the sector, including (i) supporting a pilot scheme on canola cultivation, (ii) increasing the guaranteed minimum price of sunflower seed, (iii) reducing the import tax on fava beans and legume crops, and (iv) including a future interim export tax for canola. By employing one of the policy options to revive oilseed output in Morocco, not only would stakeholders in the oilseed sector would benefit directly but there is considerable potential for reducing the national import bill for agricultural products and improving the long-term sustainability of arable regions.