Rabat – The National Interprofessional Office of Cereals and Legumes (ONICL), Morocco’s market watchdog for grains, announced that it is revising down grain subsidies for imported wheat.
The move is likely aimed at incentivizing wheat importers to turn to cost-efficient grain suppliers.
In a statement, ONICL explains that starting August 1, the baseline for issuing subsidies would be based on the average cost prices of the lowest origin among Germany, Argentina, France, and the USA.
“We would like to inform the importers of soft wheat that starting from August 1st, 2023, the average cost price used for calculating the lump-sum premium will be based on the average cost prices of the lowest origin among Germany, Argentina, France, and the USA,” the statement read.
The change in policy comes as Morocco recovers from last year’s severe drought. The previous policy did not specify a baseline for subsidies in an effort to encourage wheat importers to maintain the local market well supplied, as wheat prices soared in international markets on the backdrop of the Ukraine war.
The country has also suspended import duties on wheat to increase market supply.
In February 2022, Morocco’s Deputy Minister to the Finance Ministry, Fouzi Lakjaa, declared that exempting wheat from import duties caused the country to lose MAD 550 million ($58.6 million) in import duties while falling short of its target to bring prices down.
The budget allocated for subsidies rose to MAD 3.2 billion ($340.8 million) in 2021, MAD 2 billion ($213 million) more than pre-pandemic levels, reckoned the official.
Source: Morocco World News
