The Moroccan government has officially announced its decision to extend the subsidy program for soft wheat imports until the end of April. This strategic move, implemented through a "restitution system" for grain importers and producers, aims to maintain stable prices for bread and other essential commodities in the domestic market.
Details of the government decision
The National Interprofessional Office for Cereals and Pulses in Morocco stated that this measure falls under a joint decision signed by the Minister of Economy and Finance and the Minister of Agriculture, Maritime Fisheries, Rural Development, Water and Forests. The decision directly targets shipments of imported soft wheat destined exclusively for industrial mills producing flour, in order to cover the needs of the first four months of this year.
The context of food security and the challenges of drought
This decision cannot be separated from the broader context of the agricultural sector in Morocco. The Kingdom is facing increasing climatic challenges, including successive years of drought and low rainfall, which have directly impacted the national cereal harvest. Given that soft wheat is the most consumed staple food in the Moroccan diet (the basis of bread), domestic production is no longer sufficient to meet the growing demand from industrial mills, necessitating recourse to international markets to bridge the gap and secure strategic reserves.
Support mechanism and cost calculation
The National Grain Office explained the mechanism adopted for disbursing grants to importers, noting that the calculation of the average cost price will be based on the lowest average price of two global exporters or origins, with a particular focus on major markets such as Germany, Argentina, France, and the United States of America.
The government employs a precise formula for this subsidy; the grant covers the difference between the average cost price upon arrival at the port and the reference price, set at 270 dirhams per quintal. The value of this subsidy changes monthly based on price fluctuations in global grain markets, thus protecting importers from rising global prices while simultaneously safeguarding the purchasing power of citizens.
Continuation of the economic hedging policy
This extension complements a previous program launched by the government to boost imports between May and December of last year. Historical data indicates that during the first four months of last year, subsidies ranged from 7 to 14 dirhams per quintal, before dropping to less than one dirham as international prices declined. These measures underscore the Moroccan government's commitment to mitigating external shocks related to food prices and ensuring ample supply in domestic markets, regardless of local climatic conditions or international geopolitical fluctuations.
