Voluntary Report - public distribution

**Date:** 9/16/2004

**GAIN Report Number:** MO4014

MO4014

**Morocco**

**Grain and Feed**

**Update - Final production figures for Morocco**

**2004**

**Approved by:**

![](media/image1.wmf)Michael J. Fay

U.S. Embassy, Rabat, Morocco

**Prepared by:**

Aziz Abdelali

**Report Highlights:**

The Ministry of Agriculture published final figures for grain production
for 2003/2004. Bread wheat production is estimated at 3.5 MMT. U.S.
wheat should enjoy a 280,000 MT TRQ once the Moroccan Parliament
ratifies the recently negotiated Free Trade Agreement. The FTA is
scheduled for implementation in January 2005.

Includes PSD Changes: Yes

Includes Trade Matrix: No

Unscheduled Report

Rabat \[MO1\]

\[MO\]

**PS&D Figures Virtually Unchanged**

The Ministry of Agriculture issued final estimates for grain production
in Morocco. Bread wheat (non-durum) wheat production at 3.53 MMT is
virtually unchanged compared to the early estimates provided by the
Ministry in May 2004 and to forecast provided by AgRabat in March 2004.
Final estimates for durum wheat and barley are also very close to the
earlier estimates. Thus, no significant changes have been made to the
wheat and barley PS&D.

# Localized Sprout Damage in the Gharb Area

This year Morocco received significant rain during harvest which
resulted in sprout damage especially in Gharb region, one of largest
wheat producing areas (vicinity Sidi Kacem). The Province of Sidi Kacem
accounted this year for 10 percent of the total wheat production (durum
and bread wheat) in 2003/2004 but the sprout damages, although
significant this year, is believed to be manageable and is not likely to
result in special imports for blending purposes. Reportedly, the price
of sprouted wheat has been very low.

# Morocco-US FTA Increase Export Opportunity

While the Morocco-US FTA is being examined by the various Moroccan
Authorities before entering into force, the opportunities opened by the
FTA for U.S. wheat are significant and immediate. Under FTA, Morocco
will grant the United States two tariff rate quotas:

1)  A tariff rate quota of 250,000 MT for durum wheat to increase 10,000
    MT per year. The in quota tariff will be 25 percent below the
    prevailing rate for the first five years. Currently durum wheat is
    subject to a base duty of 95 percent on the first part of the price
    (less or equal to 1,000 dirhams/MT) and to 2.5 percent for the part
    of the price above 1000 dirhams/MT (see MO4009 for details on
    duties).

> Durum Wheat Imports
>
> Calendar Year, 1000 MT

  ------------------------- ----------- ----------- ----------- ----------- ----------- ------------
                            **1998**    **1999**    **2000**    **2001**    **2002**    **2003\***

                                                                                         

  From All Countries        **454.9**   **496.4**   **614.3**   **654.5**   **589.2**   **516.0**

  From the U.S.             138.6       109.1       28.0        15.8        18.1        90.6

  U.S. Share %              30.5        22.0        4.6         2.4         3.1         17.6
  ------------------------- ----------- ----------- ----------- ----------- ----------- ------------

Source: Official Moroccan Trade Data

\* 11 months.

2)  A tariff rate quota that depends on the local production for
    non-durum wheat. During the first year of the agreement, if the
    production is above 3.0 MMT the quota for the United States is
    280,000 MT. If the production is less 2.1, the tariff rate quota
    would be 700,000 MT.

Moroccan non-durum wheat imports

Calendar Year, 1000 MT

  --------------------- ----------- ----------- ----------- ----------- ----------- ------------
                        **1998**    **1999**    **2000**    **2001**    **2002**    **2003\***

                                                                                    

  From All Origins      **2,117**   **2,292**   **2,816**   **2,369**   **2,640**   **1,329**

  From the U.S.         68          239         329         215         32          31

  U.S. Share %          3.2         10.4        11.7        9.1         1.2         2.4
  --------------------- ----------- ----------- ----------- ----------- ----------- ------------

Source: Official Moroccan Trade Data

\* 11 months.

The United States was granted a 38 percent reduction of MFN rate that
was prevailing during negotiations (135%). Meanwhile Morocco decreased
its tariffs on bread wheat to 55 percent and increased them back to 100
percent on June2004 (see MO4009). The FTA has provision to increase this
duty reduction for the United States to keep preference if Morocco
reduces the MFN tariff.

# EU / U.S. Wheat TRQs Management under FTA

The Cereal Office is expected to tender soon (probably by beginning of
October 2004) for the first purchases under the Morocco-EU quota. The
procedure of selecting eligible importers to benefit from the
preferential access for EU wheat is expected to be published shortly and
will likely also be used as a model for attributing quota for United
States.

+-------------------------+-----+-----+------+-------+------+-------+
| **PSD Table, Morocco**  |     |     |      |       |      |       |
|                         |     |     |      |       |      |       |
| **Wheat (1000 HA)(1000  |     |     |      |       |      |       |
| MT)**                   |     |     |      |       |      |       |
+-------------------------+-----+-----+------+-------+------+-------+
|                         | 2   |     | 2003 |       | 2004 |       |
|                         | 002 |     | Esti |       | Fore |       |
|                         | R   |     | mate |       | cast |       |
|                         | evi |     |      |       |      |       |
|                         | sed |     |      |       |      |       |
+-------------------------+-----+-----+------+-------+------+-------+
|                         | U   | P   | USDA | Post  | USDA | Post  |
|                         | SDA | ost |      |       |      |       |
|                         |     |     | Offi | Est   | Offi | Est   |
|                         | Of  | Es  | cial | imate | cial | imate |
|                         | fic | tim |      |       |      |       |
|                         | ial | ate | \[O  | \[    | \[O  | \[    |
|                         |     |     | ld\] | New\] | ld\] | New\] |
|                         | \   | \   |      |       |      |       |
|                         | [Ol | [Ne |      |       |      |       |
|                         | d\] | w\] |      |       |      |       |
+-------------------------+-----+-----+------+-------+------+-------+
| **Market Year Begin**   |     | 0   |      | 07    |      | 07    |
|                         |     | 7/2 |      | /2003 |      | /2004 |
|                         |     | 002 |      |       |      |       |
+-------------------------+-----+-----+------+-------+------+-------+
| Area Harvested          | 2   | 2   | 2989 | 2989  | 3000 | 3064  |
|                         | 626 | 626 |      |       |      |       |
+-------------------------+-----+-----+------+-------+------+-------+
| Beginning Stocks        | 1   | 1   | 1166 | 1235  | 2163 | 1615  |
|                         | 488 | 488 |      |       |      |       |
+-------------------------+-----+-----+------+-------+------+-------+
| Production              | 3   | 3   | 5147 | 5147  | 5300 | 5500  |
|                         | 357 | 357 |      |       |      |       |
+-------------------------+-----+-----+------+-------+------+-------+
| TOTAL Mkt. Yr. Imports  | 2   | 2   | 2400 | 1900  | 2200 | 1500  |
|                         | 720 | 995 |      |       |      |       |
+-------------------------+-----+-----+------+-------+------+-------+
| Jul-Jun Imports         | 2   | 2   | 2400 | 1900  | 2200 | 1500  |
|                         | 720 | 995 |      |       |      |       |
+-------------------------+-----+-----+------+-------+------+-------+
| Jul-Jun Import U.S.     | 62  | 44  | 402  | 500   | 0    | 600   |
+-------------------------+-----+-----+------+-------+------+-------+
| TOTAL SUPPLY            | 7   | 7   | 8713 | 8282  | 9663 | 8615  |
|                         | 565 | 840 |      |       |      |       |
+-------------------------+-----+-----+------+-------+------+-------+
| TOTAL Mkt. Yr. Exports  | 179 | 179 | 150  | 100   | 150  | 150   |
+-------------------------+-----+-----+------+-------+------+-------+
| Jul-Jun Exports         | 179 | 179 | 150  | 100   | 150  | 150   |
+-------------------------+-----+-----+------+-------+------+-------+
| Feed Dom. Consumption   | 200 | 0   | 200  | 0     | 200  | 0     |
+-------------------------+-----+-----+------+-------+------+-------+
| TOTAL Dom. Consumption  | 6   | 6   | 6400 | 6567  | 6800 | 6600  |
|                         | 220 | 426 |      |       |      |       |
+-------------------------+-----+-----+------+-------+------+-------+
| Ending Stocks           | 1   | 1   | 2163 | 1615  | 2713 | 1865  |
|                         | 166 | 235 |      |       |      |       |
+-------------------------+-----+-----+------+-------+------+-------+
| TOTAL DISTRIBUTION      | 7   | 7   | 8713 | 8282  | 9663 | 8615  |
|                         | 565 | 840 |      |       |      |       |
+-------------------------+-----+-----+------+-------+------+-------+

+-----------------------+------+-------+------+-------+------+-------+
| **PSD Table,          |      |       |      |       |      |       |
| Morocco**             |      |       |      |       |      |       |
|                       |      |       |      |       |      |       |
| **BARLEY (1000        |      |       |      |       |      |       |
| HA)(1000 MT)**        |      |       |      |       |      |       |
+-----------------------+------+-------+------+-------+------+-------+
|                       | 2002 |       | 2003 |       | 2004 |       |
|                       | Rev  |       | Esti |       | Fore |       |
|                       | ised |       | mate |       | cast |       |
+-----------------------+------+-------+------+-------+------+-------+
|                       | USDA | Post  | USDA | Post  | USDA | Post  |
|                       |      |       |      |       |      |       |
|                       | Offi | Est   | Offi | Est   | Offi | Est   |
|                       | cial | imate | cial | imate | cial | imate |
|                       |      |       |      |       |      |       |
|                       | \[O  | \[    | \[O  | \[    | \[O  | \[    |
|                       | ld\] | New\] | ld\] | New\] | ld\] | New\] |
+-----------------------+------+-------+------+-------+------+-------+
| **Market Year Begin** |      | 07    |      | 07    |      | 07    |
|                       |      | /2002 |      | /2003 |      | /2004 |
+-----------------------+------+-------+------+-------+------+-------+
| Area Harvested        | 2002 | 2002  | 2267 | 2267  | 2300 | 2324  |
+-----------------------+------+-------+------+-------+------+-------+
| Beginning Stocks      | 220  | 220   | 225  | 253   | 645  | 613   |
+-----------------------+------+-------+------+-------+------+-------+
| Production            | 1669 | 1669  | 2620 | 2620  | 2600 | 2760  |
+-----------------------+------+-------+------+-------+------+-------+
| TOTAL Mkt. Yr.        | 336  | 364   | 100  | 140   | 150  | 100   |
| Imports               |      |       |      |       |      |       |
+-----------------------+------+-------+------+-------+------+-------+
| Oct-Sep Imports       | 156  | 178   | 150  | 140   | 150  | 100   |
+-----------------------+------+-------+------+-------+------+-------+
| Oct-Sep Import U.S.   | 0    | 0     | 0    | 0     | 0    | 0     |
+-----------------------+------+-------+------+-------+------+-------+
| TOTAL SUPPLY          | 2225 | 2253  | 2945 | 3013  | 3395 | 3473  |
+-----------------------+------+-------+------+-------+------+-------+
| TOTAL Mkt. Yr.        | 0    | 0     | 0    | 0     | 0    | 0     |
| Exports               |      |       |      |       |      |       |
+-----------------------+------+-------+------+-------+------+-------+
| Oct-Sep Exports       | 0    | 0     | 0    | 0     | 0    | 0     |
+-----------------------+------+-------+------+-------+------+-------+
| Feed Dom. Consumption | 1300 | 1350  | 1400 | 1400  | 1500 | 1500  |
+-----------------------+------+-------+------+-------+------+-------+
| TOTAL Dom.            | 2000 | 2000  | 2300 | 2400  | 2500 | 2600  |
| Consumption           |      |       |      |       |      |       |
+-----------------------+------+-------+------+-------+------+-------+
| Ending Stocks         | 225  | 253   | 645  | 613   | 895  | 873   |
+-----------------------+------+-------+------+-------+------+-------+
| TOTAL DISTRIBUTION    | 2225 | 2253  | 2945 | 3013  | 3395 | 3473  |
+-----------------------+------+-------+------+-------+------+-------+