Morocco Reopens to US Wheat in 2017 Oct. 30, 2017

Report Highlights:

Under the auspices of the US-Morocco Free Trade Agreement, on October 23, 2017, Morocco’s state cereals office (ONICL) issued the second tender of calendar year 2017 to import 30,000 MT of common wheat and 327,273 MT of durum wheat from the United States. Bids close and results should be announced on November 10. Deliveries must arrive by December 31, 2017. To facilitate trade, the Government of Morocco simultaneously lowered the MFN import duty for common wheat, effective December 1, from 135% to 30%, which translates into a reduction of the preferential U.S. in-quota duty from 83.7% to 9.9%.

Morocco Reopens 2017 Tender for US Wheat

Under the auspices of the U.S.-Morocco Free Trade Agreement, on October 23, 2017, Morocco’s state cereals office (ONICL) issued the second tender of calendar year 2017 to import 30,000 MT of common wheat and 327,273 MT of durum wheat from the United States, with deliveries required to be made by December 31, 2017 and volume commitments allowed to be +/- 10% of the auction results, which will be announced on November 10.

As prescribed in the U.S.-Morocco FTA, the preferential quota volumes in calendar year 2017 are 400,000 MT for common wheat and 360,000 MT for durum wheat. This announcement follows Morocco’s earlier December/January tender for common and durum wheat deliveries in 2017 and reflects the unassigned/remaining quota volume.

Common Wheat Duty Lowered, Effective December 1, 2017

In order to facilitate trade, the Government of Morocco simultaneously lowered the seasonal MFN import duty for common wheat, effective December 1, from 135% to 30%, which will translate into a reduction of the preferential U.S. in-quota duty from 83.7% to 9.9%. However, the common wheat import duty is a complex tariff, and only the portion of the unit value less than or equal to MAD1000/MT is charged the MFN (e.g., Black Sea) or preferential (e.g., United States) rate while the portion of the unit value exceeding MAD1000/MT remains subject to an import duty of 2.5%. For example, given an MFN duty of 30% and a preferential rate of 9.9%, if the unit value of common wheat entering Morocco is $220/MT, roughly equivalent to MAD2,000/MT, this would result in an effective tariff rate of 6.2% for the United States whereas the Black Sea would pay 16.3%.

Morocco’s MFN import duty for durum wheat remains set at 2.5% in August-May and 170% in June and July. The United States continues to benefit from a preferential import duty of 0% in August-May with no preference applied in June and July.

Morocco Imports of Common Wheat Subject to the TRQ: 1001.99.00.19 and 1001.99.00.90 (excludes Seed: 1001.91 and Feed Wheat: 1001.99.00.11), MT

Source: IHS Markit Inc.

Morocco Imports of Durum Wheat Subject to the TRQ: 1001.19.00.90 (excludes Seed: 1001.11 and June-July: 1001.19.00.10), MT

Source: IHS Markit Inc.