Moroccan Wheat Trade Pushes for Longer Import Window

Posted by Michelle Howard
Friday, April 04, 2014

Millers and wheat importers in Morocco have asked the government to establish a longer annual window for imports after scrambling to secure shipments this season, trade sources said.

Morocco, like other North African countries, depends on imports of staple cereals. It is expected to buy around 2.5 million tonnes of foreign wheat in the 2013/14 marketing year.

The country's import campaign typically runs from October to May when the local harvest starts. But this season, shipments did not get under way until January, condensing the shipment period and leading to a glut of cargoes at Moroccan ports.

To give greater visibility, Moroccan wheat trade federation FIAC and flour millers group FNM have proposed to the authorities that the import campaign start in September, trade sources said. In return, they would commit to buying 50 to 60 percent of the domestic crop available on the market.

No decision has been taken by the government, they said.

"The discussions on lengthening the next import campaign are in the very early stages," one Moroccan miller said.

No-one at Morocco's state grain agency was immediately available to comment.

The government regulates imports by setting tariffs at prohibitive levels while the local harvest is collected and then reduces them to low rates or zero to allow imports. It also offers subsidies to make it viable for importers to supply the domestic flour industry, whose prices are fixed by the state.

The authorities suspended wheat duties from January to April this year to kick-start imports, leading to a flurry of sales as buyers try to bring in cargoes before the April 30 deadline.

Despite heavy port traffic, with traders estimating 700,000 tonnes of wheat due for unloading in Morocco in April, the authorities do not plan to extend the current zero-duty window.

"The necessary volume for this season will be imported before the end of April, despite the congestion and logistical problems at the ports," a Moroccan grain importer said.

An earlier start to the import season in Morocco could be a disadvantage for its main supplier, France, in the face of growing competition from Russia and Ukraine.

Black Sea countries like Russia tend to dominate wheat exports at the start of the international marketing year, which begins in July, as they offload large volumes at aggressive prices.

French wheat tends only to become competitive with Black Sea grain after the first burst of Black Sea selling.

"In this new system, France runs the risk of being penalised," one French trader said. "Up till now, when the Moroccan import campaign began Black Sea wheat had already been heavily sold and was less competitive."

French exporters are already worried about Moroccan buyers turning to Black Sea wheat seen as offering more attractive prices for equivalent quality.

"The danger is that certain Moroccan operators say they prefer using Russian as their main wheat," Yann Lebeau, head of the Casablanca office of France Export Cereales, said at the lobby group's annual conference this week.

France should still claim about 50 percent of Moroccan wheat imports this season, he said.


(Reporting by Aziz El Yaakoubi and Valerie Parent, writing by Gus Trompiz; editing by Andrew Callus and Keiron Henderson)

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