Morocco to Keep Low Import Duty Regime for Wheat

Morocco will keep import duties on soft wheat suspended until the end of May before raising them to 17.5 percent in the June 1 to end-December period as it braces for higher imports, official and trade sources said on May 16, 2012.

A combination of dry weather and long cold spells reduced the north African country's cereals crop to 4.8 million tonnes this year, down 43 percent from the previous season.

Bread and semolina are the staples for Morocco's 34-million population.

A senior government official said import duties on barley and durum wheat will remain suspended until the end of 2012, confirming information obtained from Paris-based traders and two members of Morocco's private National Cereals Traders Association (ANCL).

"For soft wheat, the import duty will remain suspended until the end of May. It will then raised to 17.5 percent for the rest of 2012," the official said.

The customs authority declined to comment pending the publication of decrees on the official gazette.

The 17.5 percent import duty pales in comparison to 100-plus percent duty Moroccccan authorities usually impose on wheat imports in years of good harvests.

"This (17.5 percent) is a low import duty that factors in the rise in import needs after the bad harvest we will be having this year," said a member of ANCL, which lobbies for the interests of private cereal importers.

Morocco's cereals harvest is expected to include 3 million tonnes of wheat, including 2 million tonnes of soft wheat, and around 2 million tonnes of barley. Last year's harvest comprised 4.17 million tonnes of soft wheat, and 1.85 million tonnes of durum wheat.

Around half of the country's soft wheat harvest usually ends up in the formal distribution chain while the other half is consumed by growers due to the predominance of basic subsistence farming. For durum wheat, the while production is consumed by growers.

"About half the population lives in rural areas where there are no bakeries," said an ANCL member.

Morocco will likely import at least 4 million tonnes of soft wheat in the 12 months to end-May, 2013, which would be the highest since 1981, according to ANCL's data.

The figure can rise to 4.8 million tonnes if durum wheat prices reach "prohibitive levels", they said.