Highlights

Post forecasts MY 2017/18 production at 4.59 MMT for common wheat, 1.66 MMT for durum wheat, and 2.05 MMT for barley, representing a strong recovery from a disastrous 2016 crop but still well short of the bountiful 2015 harvest. The season started late but enjoyed very favorable growing conditions up until the recent onset of increasing temperatures which have threatened to derail the potential upside of a very good crop. Post forecasts MY 2017/18 wheat imports at 5.1 MMT and barley imports at 250,000 MT. Finally, Post reintroduces production, supply, and distribution estimates for rice.

Summary

Post forecasts MY 2017/18 production at 4.59 MMT for common wheat, 1.66 MMT for durum wheat, and 2.05 MMT for barley, representing a strong recovery from a disastrous 2016 crop but still well short of the bountiful 2015 harvest. The season started late but enjoyed very favorable growing conditions up until the recent onset of increasing temperatures which have threatened to derail the potential upside of a very good crop. Post forecasts wheat imports at 5.1 MMT and barley imports at 250,000 MT. Finally, Post reintroduces production, supply, and distribution estimates for rice.

Wheat and Barley

Area

Morocco estimates its total wheat and barley planted area for MY 2017/18 at 5.1 million hectares, far surpassing early season expectations of 4.8 million hectares, including 44 percent of common wheat, 35 percent of barley, and 21 percent of durum wheat.

• According to the Ministry of Agriculture, 0.20 MMT of certified seed were placed on the market for the current season, of which nearly 0.17 MMT sold, of which 75 percent was common wheat, 18 percent was durum wheat, and 7 percent was barley. Seed subsidies were set at $19/MT for durum wheat, $18/MT for common wheat, and $31/MT for barley, which covered 40 to 60 percent of the seed costs.

• Farmers may sell common wheat either to government licensed traders (grain merchants, cooperatives, and mills) at a preset price ($264/MT) or in the free market. Prices of other grains (e.g., durum wheat and barley) have no guaranteed price.

Production

Post forecasts MY 2017/18 production at 4.59 MMT for common wheat, 1.66 MMT for durum wheat, and 2.05 MMT for barley, representing a strong recovery from a disastrous 2016 crop but still well short of the bountiful 2015 harvest.

Year of Harvest

2013

2014

2015

2016

2017*

% change

Durum Wheat

1,897,234

1,410,178

2,406,741

874,985

1,660,288

53%

Common Wheat

5,036,749

3,705,706

5,658,155

1,856,137

4,590,211

66%

Total Wheat

6,933,983

5,115,884

8,064,896

2,731,122

6,250,500

63%

Barley

2,722,622

1,638,086

3,393,781

619,918

2,050,100

70%

Yield (MT/HA)

Durum Wheat

2.01

1.56

2.41

1.04

1.55

32%

Common Wheat

2.23

1.78

2.45

1.18

2.04

42%

Barley

1.38

1.03

1.64

0.51

1.15

55%

Following delayed seeding in late 2016/early 2017, wheat and barley production in Morocco progressed under favorable weather conditions with sufficient rainfalls throughout most of the growing season. Cumulative rainfall registered 289 mm from October 1, 2017 to March 31, 2017, compared to 124 mm in the previous time period. However, as a result of the late seeding, a slightly behind schedule crop has already been and is likely to continue to be confronted with high temperatures during grain fill, causing growing concerns if a generally great looking crop will be able to fully deliver on its potential. The below vegetative development index helps confirm the slightly delayed crop accelerated under very good crop conditions as well as is now suffering heat stress since late March. The main wheat and barley production areas are rainfed on the plains and plateaus of Chaouia-Ouardigha, Meknes-Tensift-Al Haouz, Gharb-Chrarda-Benihssen, Haouz, Tadla, Gharb and Sais.

Consumption

Wheat

Post estimates Moroccan consumption of wheat for MY 2016/17 at 10.2 MMT and forecasts 10.3 MMT for MY 2017/18. Morocco’s High Commission for Planning (HCP) estimates per capita wheat consumption at 216 kg annually. Common wheat represents 64 percent of the total consumption with durum wheat occupying around 36 percent.

Moroccan wheat, flour, and bread prices are politically sensitive and thus strictly managed.

• Morocco’s National Inter-Professional Office for Cereals and Legumes (ONICL) attempts to control Morocco’s within a specific price range ($260/MT-$280/MT) through the issuance – or not – of import quotas as well as changes to the MFN tariff rates throughout the year. During times of high prices in years past, ONICL has also intervened to subsidize imports in order to bring local prices down.

• Morocco also subsidizes common wheat flour, known as “National Flour” in an effort to support low-income consumers. The volume of subsidized flour has been shrinking over the years and this is expected to continue. In calendar year 2017, the quota was set at 650,000 MT, down from 1 MMT in 2016. To administer the program, ONICL launches tenders for subsidized flour every-other month throughout the year until the quota is filled. Before launching the tender, ONICL establishes a regionally-based list of flour allocations. The list is determined after several meetings within the HCP, based on a poverty map. Eligible bidders deposit a performance bond equivalent to $5.08/MT. Successful bidders have 90 days to execute delivery. The flour tendered can be for either domestic or imported wheat.

Shifting consumption preferences within bread products are taking place by affluent populations in major cities. The U.S. Wheat Associates office in Casablanca continues to implement market development and promotional activities to expand U.S. wheat exports in Morocco and other North Africa markets. These activities include the support of a milling school, managed by the Moroccan Miller Federation, as well as other market development and trade servicing programs targeted at wheat buyers in the region. The main focus of efforts has been in the promotion of common wheat products and the use of high protein improver wheat, by conducting in-house milling and baking activities to reinforce the superior end-use characteristics of U.S. wheat classes, in addition to supporting key customers in the durum market.

Barley

For MY 2017/18, Post forecasts barley consumption at 2.25 MMT. Barley is consumed mostly as animal feed in Morocco with consumption rates by sheep fluctuating heavily depending on pasture conditions. Barley is also used in the feed processing sector for cattle and dairy production. The HCP estimated annual barley (food) consumption in 2016 at 950,000 MT. Barley is becoming increasingly marginal, particularly in urban areas.

Trade

Wheat

Imports

For MY 2017/18, wheat imports are forecast at 5.1 MMT, 7.8 percent lower compared to MY 2016/17. Post also expects increased competition from the European Union to displace most of the gains made by U.S. exports in 2016/17. Post revised its earlier forecast for U.S. wheat exports for MY 2016/17 from 898,000 MT to 525,000 MT, based on industry market intelligence and trade to date.

Morocco restricts and loosens market access at varying levels throughout the year in order to provide protection to local grain producers, control prices, and manage stocks. As a result of a disastrous 2016 harvest, tariff protection for farmers was short-lived. In 2017, the current 30% MFN tariff rate is expected to jump in late May/early June 2017.

Wheat: Flour Exports

Although Morocco is a net importer of wheat, it exports limited quantities of wheat flour to neighboring African countries, resulting from Morocco’s excess milling capacity and relative regional competitiveness. For MY 2017/18, Post forecasts exports increasing to 100,000 MT.

Barley Imports

For MY 2017/18, Post forecasts Morocco’s barley imports at 250,000 MT in order to cover demand. From July 2016 to January 2017 and according to Office des Changes data, Morocco imported 339,903 MT, an increase of 49 percent, compared to the same period in the previous year. France and Ukraine supplied about 88 percent of Morocco’s barley imports for the mentioned period.

Stocks

Stocks held by agents licensed by ONICL, including grain merchants, cooperatives, processors and government managed port silos, are generally known. These agents are paid a storage premium based on wheat stored and declared to ONICL, which calculates the storage premium every 15 days at a rate of roughly $2/MT. In MY2016/17, the subsidy started on June 15, 2016 and ended on December 15, 2016. In the event of a tender for subsidized flour, the storage agency benefits from the storage premium until the second 15 days following the tender results.

Production, Supply, and Distribution Data Statistics

Wheat

Wheat

2015/2016

2016/2017

2017/2018

Market Begin Year

Jun 2015

Jun 2016

Jun 2017

Morocco

USDA

Official

New

Post

USDA

Official

New

Post

USDA

Official

New

Post

Area Harvested

3,2

3,308

2,109

2,413

0

3,321

Beginning Stocks

4,269

4,269

6,78

6,78

0

4,736

Production

8

8

2,731

2,731

0

6,25

MY Imports

4,429

4,429

5,5

5,5

0

5,1

TY Imports

4,503

4,503

5,5

5,5

0

5,1

TY Imp. from US

20

20

0

525

0

10

Total Supply

16,698

16,698

15,011

15,011

0

16,086

MY Exports

118

118

75

75

0

100

TY Exports

109

109

75

75

0

100

Feed and Residual

800

800

800

800

0

800

FSI

9

9

9,4

9,4

0

9,5

Total Cons.

9,8

9,8

10,2

10,2

0

10,3

Ending Stocks

6,78

6,78

4,736

4,736

0

5,686

Total Distribution

16,698

16,698

15,011

15,011

0

16,086

Barley

Barley

2015/2016

2016/2017

2017/2018

Market Begin Year

Jul 2015

Jul 2016

Jul 2017

Morocco

USDA

Official

New

Post

USDA

Official

New

Post

USDA

Official

New

Post

Area Harvested

1,6

2,064

1,135

1,208

0

1,788

Beginning Stocks

371

371

1,238

1,392

0

362

Production

3,5

3,4

1,076

620

0

2,05

MY Imports

817

821

800

800

0

250

TY Imports

958

958

900

900

0

250

TY Imp. from US

0

0

0

0

0

0

Total Supply

4,688

4,592

3,114

2,812

0

2,662

MY Exports

0

0

0

0

0

0

TY Exports

0

0

0

0

0

0

Feed and Residual

2,25

2,25

1,85

1,5

0

1,3

FSI Consumption

1,2

950

950

950

0

950

Total Consumption

3,45

3,2

2,8

2,45

0

2,25

Ending Stocks

1,238

1,392

314

362

0

412

Total Distribution

4,688

4,592

3,114

2,812

0

2,662

Rice, Milled

Area and Production


Rice production is negligible compared to wheat and barley yet still accounts for 85 percent of total consumption. Post forecasts harvested area for MY 2017/18 to remain steady at around 8,050 hectares, while production is forecast at 40,000 MT based on the preceding five-year average yield.

Consumption

MY 2017/18 rice consumption is forecast at 46,000 MT. Rice is not consumed daily by Moroccans, but its consumption has been on the rise in the past few years, especially with shifting consumer behavior towards easier-to-prepare, lighter, and healthier meals. It is also increasingly featured in a growing number of international restaurants in Casablanca, Rabat, and Marrakesh.

Trade

For MY 2017/18, Morocco’s rice imports are forecast to fall to 7,000 MT, meeting consumption demand. From 2012-2014, Morocco imported between 18,000 to 20,000 MT of rice per year; however, local traders estimate imports surpassed 25,000 MT mainly due to unofficial trade coming from Melilla and Ceuta, Spain. U.S. rice was last imported at significant levels in MY 2013/14 when the tariff paid was 40% and comprised of long grain and medium grain rice. The tariff on U.S. rice has since been eliminated.

Production, Supply, and Distribution Data Statistics

Rice, Milled

2015/2016

2016/2017

2017/2018

Market Begin Year

Oct 2015

Oct 2016

Oct 2017

Morocco

USDA

Official

New

Post

USDA

Official

New

Post

USDA

Official

New

Post

Area Harvested

0

8

0

8

0

8

Beginning Stocks

0

0

0

0

0

0

Milled Production

0

44

0

37

0

40

Rough Production

0

68

0

57

0

62

Milling Rate (.9999)

0

6,5

0

6,5

0

6,5

MY Imports

0

3

0

11

0

7

TY Imports

0

0

0

0

0

0

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

0

47

0

48

0

47

MY Exports

0

2

0

3

0

1

TY Exports

0

0

0

0

0

0

Consumption and Residual

0

45

0

45

0

46

Ending Stocks

0

0

0

0

0

0

Total Distribution

0

47

0

48

0

47