Morocco, a major grain importer, has amended its plan to subsidize wheat imports to make it easier for companies to bring in shipments from the Black Sea region, an official from the National Grain and Grain Occupational Office said on Wednesday.
The revision, also disclosed by traders, means that from March, importers can get a monthly subsidy if goods are loaded by the end of the month, unlike previously when ships had to arrive in Morocco by the end of the month.
The official told Reuters that encouraging shipments from the Black Sea region, which includes Russia and Ukraine, was “one of the reasons” for amending the terms of the import subsidy plan.
This change could lead to increased competition in the Moroccan import market, which is dominated by wheat from France and other suppliers relatively close to it in the European Union.
Morocco increased imports after drought affected the crop last year, bypassing Algeria and becoming the largest importer of wheat from the European Union in the 2022-2023 season.
Like other wheat importers, Morocco faced record prices last year after Russia’s invasion of Ukraine turned global grain trade upside down. The country is also suffering from an increase in food prices due to drought and other issues such as fertilizer costs.
French traders said the change should not have a major immediate impact because the ONCE separately maintained a lower subsidy rate for Russian and Ukrainian wheat than for imports from elsewhere such as EU supplies.
However, traders said this could prompt them to bring in additional shipments from EU countries bordering the Black Sea, such as Romania, and make shipments from Ukraine and Russia more feasible in the future, especially if the turmoil caused by the war there eases.
“There is a mixed feeling with the news of the loading date… but the European Union still holds the lead in the Moroccan market,” said a French trader.
Traders reported that last week saw significant sales of French wheat from northern Europe for the March shipment to Morocco.
Attention turns to the 2023 cereal crop in Morocco to see if the previous drought will affect the crop again and maintain high import requirements next season.
French traders said grain companies have been told that import subsidies will remain in place until the end of May, suggesting that Morocco will then close the import window to focus on its domestic crop.
However, Morocco usually does not confirm the end of the import campaign until the prospects for the crop are clear, around April.