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USDA GAIN: Oilseeds, Cotton, Sugar, Grain and Feed


12 August 2013

USDA GAIN: Morocco Grain and Feed Update August 2013USDA GAIN: Morocco Grain and Feed Update August 2013

In July 2013, Morocco issued its final cereal production estimate for MY 2013/14 crop at 9.70 million MT. This total is about 91.3 percent higher than production level in the previous year and includes 5.10 million MT of common wheat, 1.90 million MT of durum wheat and 2.70 million MT of barley. Morocco’s total wheat imports in MY 2012/13 were estimated at 3.777 million MT, about 6 percent higher than the quantities imported in MY 2011/12. In MY 2012/13, France continued to control the Moroccan common wheat market, with 43 percent share of the market, while the U.S. supplied 3 percent of the market for the first time since 2011. Canada was the sole supplier of Morocco’s durum wheat in MY 2012/2013. Effective 2013, Morocco authorized feed wheat imports. For MY 2013/2014, Post estimates Morocco’s wheat import to reach only 2 million MT and barley import to reach 200,000 MT. With large crop and high previous import, Morocco’s wheat imports may not resume before 2014. Effective May 1, 2013, common wheat import duties were reestablished at 17.5 percent. Durum wheat import duties will be 170 percent in June and July, then lowered to 2.5 percent effective August 2013.
USDA GAIN Report - Oilseeds, Cotton, Sugar, Grain and Feed

Post:

Rabat

Author Defined:

Production:

The harvest of the MY 2013/14 grain crops in Morocco was completed in mid-July. By the end of July, the Ministry of Agriculture issued its final estimate for total cereal production at 9.70 million MT. This production level represents an increase of about 91.3 percent compared to production in the previous year. It consists of 5.10 million MT of common wheat, 1.90 million MT of durum wheat and 2.70 million MT of barley. For MY 2013/2014 crop, wheat planted area is estimated at 3.28 million HA, of which 2.24 million HA common wheat and 1.04 million HA durum wheat, while area planted with barley was estimated at 1.69 million HA.

The table below shows the breakdown of Morocco’s grain production by marketing year.

It should be noted that Post preliminary estimates of total grain production for the MY 2013/2014 crop have been revised upward in the PS&D table, from 5.9 million MT to 7.00 million MT for wheat, and from 2 million MT to 2.70 million MT for barley. Post estimates have been aligned to the Moroccan government’s official estimates.

The overall quality of the MY 2013/2014 wheat crop is reported to be satisfactory, although there have been some concerns due to mid-April rainfall, which preceded the harvesting season. However, low temperatures during harvest helped mitigate the negative impact of the moisture on the crops. The average specific weight of MY 2013/2014 common wheat is reportedly good (79.5 kg/HL), compared to the average (77 Kg/HL), and has a small percentage of impurities.

On average 50 to 60 percent of Morocco’s common wheat is collected via official channels (authorized grains merchants, grains cooperatives, and wheat millers). In MY 2013/2014, the Moroccan Office of Cereal and Pulses (ONICL) is projecting to collect 2.8 to 3 million MT of common wheat, which represents 54 to 58 percent of domestic production. As of July 22, the quantity of common wheat collected from farmers by the National Office of Cereal (ONICL) is estimated at 1.46 million MT, about 16 percent higher compared to the previous season.

Trade:

Wheat

Morocco’s wheat imports (common and durum) in MY 2012/13 totaled 3.777 million MT, about 6 percent higher than the quantities imported in MY 2011/12. Morocco’s wheat imports were higher due to a smaller local crop. In addition, Morocco established an import restitution (subsidy) scheme to support common wheat import prices between October 1, 2012 and April 30, 2013. Morocco’s wheat imports in MY 2012/2013 consisted of 3.016 million MT of common wheat and 761,200 MT of durum wheat. France continued to control the Moroccan common wheat market, with a 43 percent market share, while Canada remained the leading supplier of durum wheat, with a 100 percent share of the market in MY 2012/2013. Ukraine was the second largest common wheat supplier with a 25 percent market share. In MY 2012/2013, Romania and Bulgaria were new common wheat suppliers to the Moroccan market and represented 6.6 and 4.6 percent market share respectively.

In April 2013, US exports of common wheat made a noticeable return to the Moroccan market after being absent since April 2011, with 88,000 MT. US common wheat exports to Morocco occurred outside the tariff rate quotas (TRQs) of the Free Trade Agreement FTA.

Morocco’s imports of common wheat in April 2013 exceeded one million MT. This is the highest monthly wheat imports since March 2011. Analysts believe that Morocco boosted its wheat import in April to rebuild its strategic wheat reserve, which were running low as of March, 2013. By the end of April, Morocco’s wheat reserve totaled 1.79 million MT, which covers more than four months of its strategic wheat requirements.

Given the large wheat reserve and production, Morocco’s wheat imports may not resume before 2014. Post estimates of total wheat import in MY 2013/2014 have been revised down in the PS&D tables, from 2.7 million MT to 2.00 million MT.

Between January and April 2013, Morocco imported 37,694 MT of feed quality wheat from France, which represents 2.3 percent of its total wheat imports. Morocco imported feed wheat, which served as a temporary substitute for corn feed. The factors that affected the feed wheat import were mainly low prices and small size shipments. Prior to 2013, Morocco was not authorizing imports of feed wheat (HC: 1001909011). Morocco’s import duties for feed wheat are 2.5 percent, compared to 17.5 percent for human grade wheat. On June 18, 2013, Morocco lowered the value added taxes (VAT) for animal feed including feed wheat, from 20 to 7 percent.

Currently, Morocco’s feed wheat imports are not dependent on pasture conditions, since feed wheat is mainly used for poultry feeding. Morocco’s subjects imported feed wheat to a colorant tracer (E142) to prevent its utilization for human consumption.

Barley

In MY 2012/2013, Morocco’s barley imports totaled 119,600 MT, a decline of 80.4 percent, compared to MY 2011/2012. Improved rainfall increased pasture coverage and hence lowered feed barley demand in MY 2012/2013. In MY 2012/2013, France supplied 89.6 percent of Morocco’s barley imports. In MY 2012/2013, Post estimated Morocco’s barley imports at 120,000 MT compared to the preliminary USDA official estimate of 250,000 MT. For MY 2013/2014, Post estimates barley imports will be around 200,000 MT.

Morocco’s local barley production normally covers about 80 to 90 percent of its domestic demand with imports making up the rest. Given that only a small portion of locally produced barley goes through official collection channels, it is difficult to have a realistic stock estimates.

Policy:

For the MY 2013/2014 wheat crop, Morocco has renewed its measures of price support to help farmers market their harvest. These measures included setting up a reference price for purchasing local wheat at 2800 dirham/MT ($330/MT). In addition, Morocco provides a biweekly storage premium of 20 dirham per MT for farmers to store their wheat at facilities licensed by the National Cereal Office (ONICL). The period for marketing the local wheat crop, in which the price of reference and the storage premium applies is effective June 1, until October 31, 2013.

In general, the government tends to protect the local crop by maintaining the wheat import duties. In this perspective, Morocco reestablished its common wheat import duties to 17.5 percent effective May 1, 2013. The government has not announced the period in which common wheat import duties will be effective. Analysts believe common wheat import duties will be effective until the end of 2013. Under the FTA, the preferential access tariff rates for US wheat exports are set at 5.2 percent for common wheat. Effective June 1 until July 31, 2013, import duties for durum wheat will increase from 2.5 to 170 percent. Effective August 1, durum wheat import duties will be lowered to 2.5 percent.

Tariff Rate Quota (TRQ) for MY 2013/2014

Given the size of Morocco’s MY 2013/2014 wheat crop, the TRQs for US common wheat exports under the FTA are set at their minimum level of 386,667 MT for CY 2014. The TRQs for US durum wheat exports are set at 330,000 MT for CY 2014.

In CY 2013, the TRQ for US common wheat of 548,592 MT was rendered ineffective due to an import duty suspension. Between January and July 2013, the Government of Morocco did not administer any TRQ for US common wheat. Given Morocco’s large common wheat harvest, The government is not likely to successfully administer a TRQ for wheat until 2014.

For Durum Wheat, Morocco tendered unsuccessfully 320,000 MT on two tranches to fulfill its TRQ obligations for CY 2013. US durum wheat quota will be 330,000 MT for CY 2014.

August 2013

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