Morocco doubles wheat import subsidy as global prices intensify

17:55

Morocco is significantly increasing state support for soft wheat imports as mounting pressure on international grain markets threatens to raise the cost of supplying the domestic market.

Through the National Interprofessional Office for Cereals and Pulses (ONICL), the government has raised the flat-rate import subsidy for soft wheat to 44.48 dirhams per quintal for October, up from 20.80 dirhams. The measure represents an increase of roughly 114% and is designed to help contain domestic costs while maintaining the country's food-security safeguards.

A sharper intervention as international wheat prices rise

The decision comes as European grain markets face growing supply constraints. Disruptions affecting shipments from Russia and Ukraine, combined with severe restrictions on maritime freight through the Black Sea, have tightened the availability of wheat on international markets.

The impact is particularly visible in Europe, where the French market has come under heavier demand. International prices for soft wheat are now approaching 320 dirhams per quintal, according to the information provided, while the euro's appreciation against the Moroccan dirham has added another layer of pressure to import costs.

For Morocco, the widening gap between international procurement costs and the domestic supply framework has made additional support necessary.

Protecting the price paid by industrial millers

The revised subsidy is intended to compensate importers for part of the difference between the actual cost of bringing wheat into Morocco and the price at which supplies are delivered to the country's industrial flour mills.

That guaranteed delivery price remains fixed at 270 dirhams per quintal. The level of support announced for October marks the most substantial intervention of its kind since 2023, underscoring the government's effort to prevent international volatility from being transferred directly to the domestic bread market.

The policy also reflects a broader objective: ensuring that higher international grain prices do not undermine the affordability of staple food products in Morocco.

French supplies face mounting pressure

The situation could become more difficult in the coming months if current market conditions persist. According to the sources cited in the original information, France is being called upon heavily to compensate for reduced availability from other major exporters, raising concerns over the volume of wheat it could still make available for export later in the season.

French exportable stocks could come under significant pressure by December or January if demand remains elevated.

The outlook is even more sensitive because Russia accounts for close to 30% of global wheat exports, meaning any prolonged disruption in Black Sea shipments could have consequences well beyond European markets.

Morocco's strategic reserves under pressure

For Morocco, the issue extends beyond the immediate cost of imports. A prolonged period of elevated international prices and constrained supplies could increase pressure on national mechanisms designed to support imports and maintain strategic grain reserves.

The October increase in the import subsidy therefore represents more than a temporary budgetary adjustment. It is a response to a rapidly changing international grain environment in which freight disruptions, currency movements and reduced export availability are converging at the same time.

With wheat playing a central role in Morocco's food system, the evolution of global supply routes over the coming months will be closely watched by both public authorities and the milling industry.