RABAT, April 6 (Reuters) – Millers and wheat importers in Morocco have asked the government to extend an import window and allow an earlier start to next season’s imports, as a severe drought threatens to slash the local grain harvest, trade sources said.
Cereal production in Morocco is expected to slump from a record 11 million tonnes last year to between 3 and 4 million in 2016, officials and analysts say.
Morocco is major customer for Canadian durum. It gets most of its wheat from Europe.
Moroccan wheat trade federation FNCL has proposed that the current import campaign be extended to the end of May from April 30, and for next season’s window to be opened in August, sources said.
The country’s import campaign typically runs from October through April, after which tariffs are raised to prohibitive levels in order to protect the local harvest.
No decision has been taken by the government but officials seemed responsive in a meeting on April 4, the sources said. No-one at the Moroccan agriculture ministry was immediately available to comment.
To enable imports to continue into May, FNCL is requesting the government maintain duties at 30 percent, before raising them in June and July, the sources said. It also proposed duties from August be set in relation to international prices to let imports resume.
The U.S. Department of Agriculture’s attache in Morocco said in a report this week that Moroccan cereal imports would reach 4.6 million tonnes in the 2016/17 season, including 3.9 million tonnes of wheat and 0.7 million of barley.
For the current season, analysts and traders expect cereal imports to remain less than 3 million tonnes, as last year’s bumper harvest helps mitigate the impact of the drought.
The prospect of an extended import period in Morocco is significant for an international wheat market facing high stocks, particularly in France, Morocco’s traditional supplier.
“The market is betting on a decision that the Moroccan government will keep custom duties at 30 percent in May,” one French trader said.
France had already exported 1.2 million tonnes of soft wheat to Morocco by the end of March, and the figure is expected to rise to 1.5 million at the end of April, data compiled by Reuters showed.
Traders say the prolonging of the current 30 percent import duty into May would also be important to give exporters enough visibility to bid in a preferential tariff quota for European Union wheat.
Moroccan agency ONICL is holding a tender to buy 360,000 tonnes of EU soft wheat under the quota, which offers a further tariff reduction compared with the current duty. The bidding deadline is on April 7 and shipments should arrive at Moroccan ports by May 31.
