Highlights

The Government of Morocco released its initial wheat and barley production forecast for the 2017 crop (4.94 MMT of common wheat, 2.33 MMT of durum wheat, and 2.89 MMT of barley), both of which remain higher than Post and official USDA estimates. As expected, Morocco reduced its quota for subsidized wheat flour production, renewed its price and storage support programs, and increased its customs duty for common and durum wheat immediately ahead of the harvest to protect local producers.

Crop Update

Albeit higher than USDA’s official estimates, Post holds its area and production numbers for wheat in MY2017/18. As earlier discussed, following delayed seeding, conditions were largely favorable until the crop reached the flowering stage, which typically occurs during the month of April, when high temperatures greatly accelerated crop maturity and led to an early harvest.

On April 16, the Ministry of Agriculture announced its first harvest estimate for wheat and barley production – set at 10.2 MMT, including 4.94 MMT of common wheat, 2.33 MMT of durum wheat, and 2.89 MMT of barley, and up from the previous year’s drought-reduced crop 3.3 MMT. The Ministry of Agriculture will publish the final production numbers in July. On May 10, FAO announced its production estimates of 7.0 MMT for all wheat and 2.8 MMT for barley.

Trade Update

Wheat

Post revises down wheat imports in 2017/18 to 4.8 MMT in an effort to offset its maintenance of a higher production number. Post also maintains its earlier forecast of trade year (TY) imports from the United States at 10,000 MT, based on the historical minimum. Post also makes changes to MY and TY trade estimates in 2015/16 and 2016/17, based on updated figures by Morocco’s customs authority, the Office des changes. Of particular note, MY2016/17 imports are lowered to 5.2 MMT, based on trade through April, just ahead of a significant increase to seasonal customs duties for common wheat in May and durum wheat in June.

Barley

Post proposes no changes to the barley trade in 2017/18 with the exception of stocks caused by a modification to MY2015/16 and MY2016/17 trade estimates, based on final and year-to-date customs figures. Post also revises down its estimate for 2016/17 barley feed and residual use to 1,450 MT due to available pasture condition during the growing season.

Customs Duties Raised

On May 16, the Government of Morocco announced the increase of the MFN import duty on common wheat from 30% to 135%. This new customs duty for common wheat is in effect through December 31, 2017. Simultaneously, Morocco adjusted the preferential duties on common wheat from the United States and European Union from 9.9% to 83.7%.

Morocco’s MFN import duty for durum wheat is set at 2.5% in August-May and 170% in June and July. The United States and European Union benefit from a preferential import duty of 0% in August-May but have no preference in June and July.

Subsidized Flour Program Shrinks

On June 14, 2017, the Government of Morocco fixed the annual quota of subsidized common wheat flour 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.

Price Support and Storage Subsidies Reinstated

On May 9, 2017, Morocco’s National Cereal Office (ONICL) renewed its support measures to help farmers market their harvest, effective May 15 through October 15, 2017. The measures include:

• Establishing a reference price for purchasing local wheat at 2,800 Dh/MT (≈$286/MT)

• Providing a biweekly storage premium of 20 Dh/MT (≈$2/MT) for grain traders and Moroccan agricultural cooperatives to store their wheat at facilities licensed by ONICL.

Wheat

Wheat

2015/2016

2016/2017

2017/2018

Market Begin

Jun 2015

Jun 2016

Jun 2017

Morocco

USDA

Official

New

Post

USDA

Official

New

Post

USDA

Official

New

Post

Area Harvested

3,308

3,308

2,413

2,413

3,3

3,321

Beginning Stocks

4,279

4,279

6,854

6,808

4,81

4,484

Production

8,064

8,064

2,731

2,731

5,8

6,25

MY Imports

4,429

4,383

5,5

5,2

4,9

4,8

TY Imports

4,503

4,479

5,5

5,1

4,9

4,8

TY Imp. from US

20

10

0

888

0

10

Total Supply

16,772

16,726

15,085

14,739

15,51

15,534

MY Exports

118

118

75

55

100

100

TY Exports

109

110

75

50

100

100

Feed and Residual

800

800

800

800

800

800

FSI Consumption

9

9

9,4

9,4

9,5

9,5

Total Consumption

9,8

9,8

10,2

10,2

10,3

10,3

Ending Stocks

6,854

6,808

4,81

4,484

5,11

5,134

Total Distribution

16,772

16,726

15,085

14,739

15,51

15,534

Yield

2.4377

2.4377

1.1318

1.1318

1.7576

1.882

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

2,064

2,064

1,208

1,208

1,8

1,8

Beginning Stocks

371

371

1,238

1,242

158

162

Production

3,4

3,4

620

620

2

2

MY Imports

817

822

700

500

500

500

TY Imports

958

939

600

400

500

500

TY Imp. from US

0

0

0

0

0

0

Total Supply

4,588

4,592

2,558

2,562

2,658

2,662

MY Exports

0

0

0

0

0

0

TY Exports

0

0

0

0

0

0

Feed and Residual

2,15

2,15

1,65

1,45

1,65

1,65

FSI Consumption

1,2

1,2

750

750

800

800

Total Consumption

3,35

3,35

2,4

2,4

2,45

2,45

Ending Stocks

1,238

1,243

158

163

208

213

Total Distribution

4,588

4,592

2,558

2,562

2,658

2,662

Yield

1.6473

1.6473

0.5132

0.5132

1.1111

1.1111