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Morocco grain traders see strong harvest, lower soft wheat imports

By Ahmed Eljechtimi

RABAT, April 1 (Reuters) - After two years of drought, Morocco's imports of soft wheat are expected to shrink this season as more rain augurs a bigger, higher-quality crop of domestic cereals, a local trade association said.

The central bank has already raised its economic growth projection from earlier forecasts based on a predicted cereals harvest of 9.5 million tonnes, well up from 3.2 million tonnes last year.

However, Jamal M'Hamdi, the head of Morocco's cereals and grain traders association, said he expected an even bigger crop this year, leading to lower import requirements.

"Cereals output is expected to exceed 10 million tonnes this season, which means less imports," he said.

Last year's harvest was 39% lower than in 2019 due to drought, leading to a 46.3% increase in wheat imports to $1.5 billion, the foreign exchange regulator said.

Morocco imported 3.6 million tonnes of soft wheat, 1.02 million tonnes of durum and 1.02 million tonnes of barley according to data from the grains agency data.

The head of the French cereals exporters' office in Casablanca, Yan Lebeau, said it was too early to accurately estimate French wheat exports to Morocco this year.

"Despite clement weather in Morocco, no one can give estimates before the end of April," he said.

This year, 4.2 million hectares have been sown with cereals, including 40% with soft wheat, 22% durum and 34% barley, the agriculture ministry said. Well-distributed rainfall since the new year has benefited the crop, it said in a statement.

Morocco usually imports 2 to 3 million tonnes of soft wheat, mostly from France depending on local output.

Although traders prioritise the local harvest, only about half the Moroccan crop is sold to industrial mills, which supply 80% of Morocco's soft wheat needs, because small farmers hold back some for their own use, M'Hamdi said.

"Traders are committed to buying local cereals first, which form the basis of Moroccan flour complemented by imports to meet the needs of the local market," he said.

Stockpiles are at a comfortable level, ensuring a smooth transition to this season's harvest, M'Hamdi added.

Soft wheat reserves cover three months of industrial millers' needs, a member of the millers federation said.

Morocco offers incentives for millers to use domestic wheat, including through customs duties. However, it has suspended import duties on soft wheat until the end of May to ensure supplies and stabilise prices. (Reporting by Ahmed Eljechtimi, editing by Angus McDowall and Hugh Lawson)

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