Morocco Set to Reintroduce Customs Duty on Soft Wheat -Industry Body

(CNBC) – The Moroccan government is expected to reintroduce a customs duty on soft wheat imports to promote sales from the local harvest which has been hit by a lack of rainfall, the president of the National Millers Federation said on Wednesday.

Morocco scrapped a customs duty on soft wheat imports in November to maintain price stability. Chakib Alj of the millers federation said the government will announce on Thursday that it is being reintroduced, after the plan is approved by the government council.

“Raising the customs duty on soft wheat is a usual procedure at this time of the year and may continue for up to three months to protect the local output,” Alj told Reuters by phone.

Morocco’s cereals production is expected to total 6.1 million tonnes in 2019, down 40.7 percent from last year, according to the agriculture ministry.

This years harvest includes 3.5 million tonnes of soft wheat, 1.35 million tonnes of durum wheat and 1.25 million tonnes of barley, the ministry said in its forecast.

These preliminary figures show that Morocco could import about 3 million tonnes of soft wheat this year, Alj said. Last year, Morocco imported 2.6 million tonnes of soft wheat, 0.9 million tonnes of durum wheat and 0.41 million tonnes of barley, statistics from the state-run grains authority ONICLE showed.

Morocco usually offers subsidies to local millers to opt for domestic wheats instead of imports.

Wheat supply is key to Moroccos stability as bread and semolina are staples for the population of 35 million. In its 2019 draft budget, the government said it will spend 17.67 billion dirhams on subsidies of wheat prices along with sugar and cooking gas, up 4.65 billion dirhams compared with this year.

Agriculture represents about 15 percent of the Moroccan economy. The government expects the economy to grow 3.2 percent in 2019 based on estimates of cereals production of 7 million tonnes.