Morocco will continue to import soft wheat without duty for more four months to keep the price of flour stable at MAD 260 per quintal.
Rabat – The government council approved a decree on Thursday maintaining the suspension of import duties on soft wheat and its derivatives for four months until April 2019.
The government had decided earlier to apply a fixed customs duty of 30 percent on soft wheat starting January 2019, down from 135 percent.
The duty would raise the domestic prices of soft wheat and flour, and therefore bread prices, Government Spokesperson Mustapha El Khalfi said at a press conference after the government council meeting.
Through the decree, the government seeks to keep the price of flour stable at MAD 260 per quintal. Flour is also subsidized.
If Morocco added the 30 percent import duty on wheat, El Khalfi said, the import cost of soft wheat would be between MAD 290 and MAD 300 per quintal.
Thanks to good weather, Morocco expects to have a 70-million-hectare cereal crop in 2019, increasing domestic wheat production to 8.2 million tons this season, nearly 1 million tons more than last year.
According to El Khalfi’s statistics, the national soft wheat stock at mills and storage centers is estimated at about 14.3 million quintals, covering three months and seven days of the country’s industrial mill needs.
The government affirmed that the decree is one part of the kingdom’s social measures. Morocco also subsidizes butane gas to maintain its price at MAD 41 per 12-kilogram bottle. The state subsidizes each bottle by MAD 56.
In the 2019 Finance Bill, the government allocated MAD 17.67 billion for the subsidy fund to subsidize butane gas, sugar, and flour. The figure is a significant increase of MAD 4.65 billion from the 2018 budget.
In April 2017, the government decided to raise import duties for soft wheat from 30 to 135 percent. The former economy minister Mohamed Boussaid explained that the switch was made to stabilize prices and boost local soft wheat marketing.
In October 2017, the government council adopted draft decree 2.17.633 to lower the import tax to 30 percent in December 2017 “to protect the national production and the purchasing power of the citizen by ensuring the supply of good quality wheat to the national market,” according to a statement by El Khalfi at the time.
Morocco’s main wheat imports come from the EU (31 percent), Russia (18 percent), Ukraine (18 percent), and the US (16 percent).