Should we fear a surge in wheat prices in Morocco? All the factors seem to come together to envisage such a scenario: price instability, pressure on supply, doubts about global production and geopolitical unrest. For the moment, the situation remains under control in the Kingdom. But we must hope for less significant disruptions in the medium term.
The government has taken the lead in dealing with supply disruptions. In fact, from August onwards, it increased the credits dedicated to supporting wheat importers, a basic necessity product for citizens. The country will need to purchase larger quantities, due to the catastrophic cereal season caused by the severe drought. We will go from 7.8 million tonnes in 2021-2022 to 10 million imports this season, including some 6 million of soft wheat.
Professionals received, at the end of September, the second tranche of additional subsidies, Abdelkader Alaoui, president of the National Flour Milling Federation (FNM), told the press, estimating that the anticipation measures taken by the government are boosting the market domestic sheltered from soaring prices.
Egypt and Algeria on the offensive
Over the past few days, wheat prices have reached 230 euros per tonne in Euronext quotes, up almost 20% since the end of August. According to the FAO Food Price Index, world wheat prices increased in September, following three consecutive months of decline.
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In addition to unfavorable weather conditions in some of the main exporting countries, the frenzy in Egypt, the world’s largest importer of wheat, has raised the stakes. Acting in light of a warning from intelligence services on food security, the country has just concluded a historic order: 3.12 million tonnes between November and April.
Egyptian wheat imports are expected to reach new highs in 2024/2025, says Reuters. According to the latest FAO estimates, the country of the pharaohs should increase its cereal imports by 1.6% to reach 12.2 million tonnes.
Far from the propaganda images of a record cereal harvest, Algeria is currently negotiating major wheat purchase contracts, which represent around 60% of total cereal imports and are expected to reach 8 million tonnes. Algerian production is expected to be below average in 2024, due to the rainfall deficit.
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The FAO recalls that, since the end of 2020, the country has authorized the importation of soft wheat with a higher percentage of insect damage (from 0.2% to 0.5% and a further increase to 1% at the end of 2021) in the aim of increasing the number of its potential supplier countries.
Russia worried
Morocco’s leading supplier of soft wheat during the months of August and September, Russia faces strong demand and will find it difficult to meet the needs of its main customers, mainly in North Africa.
Russian wheat prices have reached record highs in the last two weeks, with an increase of 6.7%, their highest level since June 13, 2024. For their part, Russian exporters are under pressure. Local media report that the Russian Grain Union wants to propose to the authorities a revision of the methodology for distributing export quotas for the second half of the season.
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In addition, a state of climate emergency has been declared in certain regions due to the frosts and extreme drought, which have been occurring since last May. These unfavorable conditions will negatively impact production for 2024-2025 and, consequently, export potential. The same situation prevails in the Black Sea countries, which have become privileged partners of clients.
France is struggling
The leading producer and exporter of soft wheat in Europe, France is experiencing one of the worst harvests of this cereal in the last four decades. The Ministry of Agriculture estimated, in a note from its statistics service (Agreste), production at 26.3 million tonnes (Mt), down 24.9% compared to 2023 and 23.9 % on the average of the last five campaigns.
Last July, France was the leading supplier of soft wheat to Morocco with 150,882 tonnes, notably ahead of Russia (149,050 tonnes), Bulgaria (88,182 tonnes), Germany (87,257 tonnes) and Romania (85,890 tonnes) .
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The Argus Medias firm had given a series of explanations for the poor harvest, including “poor establishment, asphyxiation of the roots by excess water, strong pressure from diseases and weeds, too low temperatures during the reproduction phase and again the lack of sunshine.
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