Moroccan wheat crop shows promising recovery in 2023 season amid drought

Morocco’s wheat production areas are showing substantial recovery for the upcoming 2023 crop season from the current 2022-23 marketing year, which has suffered low levels of precipitation and drought conditions.

The US Department of Agriculture forecast wheat production for the next marketing year, 2023-24, will increase by 41% from the previous season, reaching 3.8 million mt.
As a result, Morocco is expected to reduce its wheat imports for the next season by approximately 7% or 7 million mt. In the current season, 2022-23, Morocco became the biggest importer of European wheat due to a lack of Black Sea supplies following Russia’s invasion of Ukraine.

Currently, the leading exporter of wheat among EU countries is France at 8.8 million mt, with 10.4 million mt available this marketing season. Morocco primarily imports wheat from France, which supplied up to 1.4 million mt in bulk alone during the current marketing year, according to S&P Global Commodities At Sea bulk shipping tracker.

“Morocco booked all quotas till the end of May,” a French-based trader said. “[And the French] export season is almost done three months ahead of the [marketing year] deadline [in June].”

In total, Morocco has imported 3.5 million mt this season so far, up from 1 million mt in 2021-22 after a drought-hit harvest last year. Morocco’s planting season in the fall of 2021 was one of the driest starts in 30 years which limited the amount of grain that was planted. The country overtook Algeria as the EU bloc’s largest source of wheat imports.

Other top EU wheat exporters include Romania (3 million mt) and Germany (2.8 million mt), the EU Crop Observatory’s latest data showed. Since the Russia-Ukrainian war, Ukrainian and Russian wheat imports to Morocco have dropped from 24% to less than 3%, as Moroccan traders consider the high cost of logistical war risks for the Black Sea grain. For the 2023-24 season, the USDA forecast increased competition from the EU and Brazil.

Morocco’s government is set to implement a 135% tariff on wheat imports starting during the harvest period, on May 31, 2023, to stabilize domestic wheat prices and boost local production that fell in 2022 due to the drought.

The government also subsidizes the price of common wheat flour, known as National Flour, to keep the price of bread affordable for low-income households, where around 70% of wheat consumption occurs in urban areas and 66% in rural areas. With an estimated population increase of 37 million, the USDA forecast a steady increase in wheat consumption of around 10.7 million mt in the next season.

Platts, part of S&P Global Commodity Insights, assessed 12.5% FOB EU wheat CVB basis Constanta and CPT Rouen 11% protein quality at around $281/mt on April 6.

Tags: precipitation, Morocco, harvest, EU, Production, wheat, drought, imports