Morocco will suspend the customs duty on soft wheat for four more months until April 30, 2019, to maintain price stability and ensure regular supply, a government spokesperson said on Thursday. The government has acted to maintain the import price of soft wheat at 260 Moroccan dirhams per quintal and as a social measure, Mustapha El Khalfi said at a weekly press briefing.
Morocco had announced in October that it would impose a 30 percent customs duty starting on January 1. The suspension of the duty comes amidst market instability due to low production in the main wheat producing countries and notably lower offer from the Black Sea area.
"Keeping such a duty would trigger a surge in wheat prices of up to 300 dirhams per quintal," Khalfi said. Wheat supply is key to Morocco's stability as bread and semolina are staples for the population of about 35 million. The extended suspension will be published in the official bulletin before January 1, Khalfi added.
As of Dec. 1, reserves of soft wheat stood at 1.43 million tonnes, enough to cover 3.7 months of millers' needs, he said. "Suspending the customs duty is a wise decision," Chakib Alj, head of Morocco's millers federation (FNM) said. "Let's hope that prices will not rise in the international market which would push Morocco to spend more on subsidising soft wheat," he told Reuters by phone.
Morocco's agriculture ministry announced this year an exceptional harvest of 10.3 million tonnes, including 4.91 million tonnes of soft wheat, 2.42 million tonnes of hard wheat and 2.92 million tonnes of barley. But in October, it reported a slow pace in the collection of the local harvest.
French wheat exporters estimated Morocco's soft wheat import needs at 3 million tonnes in the 2018-19 season. Morocco said in its 2019 draft budget it will spend 17.67 billion dirhams on subsidies of wheat prices along with sugar and cooking gas, up 4.65 billion dirhams from 2018.
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