Morocco’s Trade Deficit Soaring Amid High Energy, Grain Prices

Rabat – After showing signs of shrinking at the end of 2021, Morocco’s trade deficit is hiking yet again on the backdrop of rising energy and grain prices, as the government steps in to subsidize common wheat to preserve citizens’ purchasing power.

Morocco’s trade deficit settled at MAD -20.260 billion ($2.1billion) at the end of January 2022, a staggering 75% year-to-year increase, according to Morocco’s National Exchange Office, the official trade watchdog.

Imports rose by 39.5%, settling at MAD 50.905 billion ($5.3 billion) while exports rose by 23%, amounting to MAD 30.645 billion ($3.1 billion) echoing Morocco’s overall economic recovery, details the statement.

While the volume of imported energy commodities remained relatively stable (from 502 million tonnes at the end of January 2021 to 579 million tonnes at the end of January 2022), rising gas, oil, and grain prices have sent Morocco’s trade deficit soaring.

Gas-oil prices rose at an annual rate of 60.4%, triggering a 67% rise in Morocco’s energy spending and weighing down on the country’s trade balance.

Over the same period, Morocco spent MAD 1.706 billion ($177.8 million) on imported grains amid an unprecedented hike in prices worldwide.

Rising at an annual rate of 21.3%, grain prices went from MAD 2.669 per tonne to MAD 3.238 tonne at the end of January 2022, grain prices coupled with rising demand have all contributed to the widening of Morocco’s trade deficit.

Common wheat is a staple to the Moroccan diet. Between 2021 and 2022, grain consumption went from 338 million tonnes to 805 million tonnes, according to Morocco’s exchange office.

A mixture of geopolitical tensions in Western Europe, coupled with the COVID-induced economic crisis have all sent energy and gas prices skyrocketing over the past two years.