The Government Council held a meeting Thursday May 6th 2021 and passed two decrees, the first one is related to the re-establishment of the collection of import duties on soft wheat and its derivatives and modifying the applicable import duty on these products’ quota and the second one n°2.21.329 on the re-establishment of import duties on hard wheat collection.
The present draft decrees, presented by the Minister of Economy, Finance and Administration Reform, Mr Mohamed BENCHAABOUN, aim to suspend the government measures for ensuring soft wheat and hard wheat supply, in consequence of the shortage witnessed in the national market in 2020.
The decree on the re-establishment
of applicable import duties on hard wheat and its derivatives collection and
the modification of the applicable import duty on these products’ quota.
By decree n° 2-20-922 dated
December 25th 2020, the applicable import duties on soft wheat and its
derivatives collection was suspended January 1st 2021 until May 31st 2021. The
present measure was aiming to maintain a minimum stock allowing a national
market supply in the best conditions.
Currently, the soft wheat
stock, held in the national market by cereal operators, has reached a
sufficient level to cover the milling industry requirements for more than 3.5
months. In addition, as the current agricultural campaign is progressing in
proper conditions, it heralds a good cereals harvest for this year.
Internationally, the global
soft wheat prices have witnessed a bullish trend since August 2020. However, in
consequence of the announcement of a favourable outlook of the global
production for the agricultural campaign 2021/22, the prices have witnessed a
downtrend starting March 2021.
Based on the current price
levels observed on the global soft wheat market and on the import duty rate of
35%, which should be applied starting June 1st 2021, the simulations emphasize
a cost price, moroccan ports exit, of approximately 290-310 MAD/QL and 268-287
MAD/QL within the framework of the Morocco-European Union association
agreement. This level is deemed insufficient to protect the national production
of soft wheat during the collection period, knowing that the global market
trend remains bearish.
Given the above, in view of
the perspectives of a proper soft wheat production domestically and
internationally, and by means of the related decree, the collection of
applicable import duties on soft wheat and its derivatives will be
re-established at a rate of 135% starting May 15th, 2021.
The decree on the
re-establishment of applicable import duties on hard wheat collection
By decree n°2-20-296 dated
March 27th 2020, the applicable import duties on hard wheat was suspended
starting April 1st 2020 in order to allow a normal supply for the market
following a weak national collection.
Therefore, the importations
by economic operators have allowed a regular supply for the national market as
well as sufficient stock levels to cover the milling industry requirements for
more than 4 months.
In addition, as the current
agricultural campaign is progressing in proper conditions, it heralds a good
cereals harvest for this year.
Internationally, the global
market of hard wheat has witnessed, since August 2020, a high level of demand
which increased the prices from 290$/TM to 350 $/TM. However, by the end of
March 2021, the prices have witnessed a bearish trend, respectively ranging
around 365 $/TM and 350 $/TM for the hard wheat coming from Canada and France.
Based on the current levels
of prices observed in the global hard wheat market and in consideration of the
current suspension of the import duties collection, the cost price, moroccan
ports exit, would be of 345 MAD/QL for the Canada originated one, and of 334 MAD/QL
for the France originated one, which is insufficient for the protection of the
hard wheat national production. However, the application of a 170% rate, for
the period of June-July 2021, would lead to a hard wheat cost price, moroccan
ports exit, of 510-525 MAD/QL, which would allow a great protection of the
national production during the collection period.
Given the above, in view of the
perspectives of a proper hard wheat production domestically and internationally
and by means of the related decree, the collection of applicable import duties
on hard wheat collection will be re-established starting June 1st 2021.