Agri Money
by William Clarke
A drought in the Maghreb could boost wheat demand, as the US government ups its forecast for Moroccan imports.
The US Department of Agriculture’s bureau in Rabat lifted its estimate of 2015-16 wheat imports to Morocco, by 200,000 tonnes to 3.0m tonnes, as buying picks up over fears of heat damage to the coming harvest.
And reports of a developing trade row with the EU threatens supplies from that direction, usually the main origin for Moroccan wheat.
‘Unfavourable conditions’
The 2016-17 crop, which will take place this summer, has seen “unfavourable conditions with a significant shortage in rainfall,” the bureau said.
“With the current drought, wheat imports are expected to occur earlier in the year in anticipation of a smaller harvest next summer.”
The US bureau also saw a shortfall in existing stocks also driving a pick-up in buying, before the start of the next harvest.
The inventories in place “will cover domestic demand only through March, consequently, imports are expected to rise,” the bureau said.
Increased demand
On Wednesday Kyle Tapley, of MDA Weather Services, warned that dryness “remains a concern across most of the wheat area in North Africa, especially across Morocco, north-western Algeria, and north-eastern Tunisia.
Mr Tapley added that although there may be some light showers in Morocco this week “no significant improvement in soil moisture is expected”.
Agriculture in Morocco is dependent on rainfall, as only 15% of the production is from irrigated land.
Last week the International Grains Council reported that parts of North Africa had been “unfavourably dry, with drought in Morocco, the worst affected country, Algeria and Tunisia, which had earlier benefitted from good rains.
Wheat areas in the region were forecast down 5% year-on-year, at 7.0m hectares.
Trade disruptions
On Thursday Reuters reported that Morocco has suspended contacts with the European Union delegation in Rabat over a trade row.
Although the nature of the disagreement is unclear, any disruption could present a problem for sourcing wheat imports.
Onicl, Morocco’s state grain buyer, on Thursday tendered for 105,000 tonnes of soft wheat, from domestic or overseas sources.
Last month Onicl opened a tender for 360,000 tonnes of soft wheat and 315,000 tonnes of durum wheat from the US, under a preferential tariff agreement, but only one bid of 9,800 tonnes of soft wheat were accepted.
