Required Report - public distribution

**Date:** 4/15/2004

**GAIN Report Number:** MO4004

MO4004

**Morocco**

**Sugar**

**Annual**

**2004**

**Approved by:**

![](media/image1.wmf)Merritt Chesley

U.S. Embassy, Rabat, Morocco

**Prepared by:**

Aziz Abdelali

**Report Highlights:**

Sugar beet production is expected to be down as a result of an
anticipated lower planted area this year. The area planted to sugar cane
continues its downward trend because of high production costs.

The recently concluded free trade agreement with the US could result in
more price competitive sugar substitutes (corn milling products) being
available in the local market and result in lower use of sugar by
industrials in the medium term.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

Rabat \[MO1\]

\[MO\]

Table of Contents

[Production 3](#production)

[Trade 3](#trade)

[Policy 4](#policy)

[Privatization of Beet and Cane Plants
4](#privatization-of-beet-and-cane-plants)

[Sugar Crops are major pole of development in Morocco
4](#sugar-crops-are-major-pole-of-development-in-morocco)

#  

# Production

Morocco sugar beet production is expected to be down slightly, mostly
because the uninterrupted rainfall during the planting season resulted
in less area planted this year, especially in the Gharb (vicinity of
Kenitra) and Doukkala (vicinity of El Jadida). Yields are expected to be
comparable to last year's.

Although Sugar cane production is expected to be slightly higher due to
higher yields in the Gharb region, the area planted to sugar cane
continues to show a decreasing trend as farmers in the Gharb are
reluctant to plant new sugar cane fields because of the high cost of
production.

**Table 1. Sugar Beet Area Planted and Production (1,000 hectares, 1000
MT)**

+--------------+------+---------+------+---------+------+---------+
| Year of      | **20 |         | **20 |         | **Fo |         |
| Harvest      | 02** |         | 03** |         | reca |         |
|              |      |         |      |         | st** |         |
|              |      |         |      |         |      |         |
|              |      |         |      |         | **20 |         |
|              |      |         |      |         | 04** |         |
+--------------+------+---------+------+---------+------+---------+
| Region\*     | Area | Pro     | Area | Pro     | Area | Pro     |
|              |      | duction |      | duction |      | duction |
|              | Pla  |         | Pla  |         | Pla  |         |
|              | nted |         | nted |         | nted |         |
+--------------+------+---------+------+---------+------+---------+
| Gharb        | 17.0 | 763     | 17.2 | 629     | 14.6 | 530     |
+--------------+------+---------+------+---------+------+---------+
| Doukkala     | 18.5 | 985     | 21.6 | 1,352   | 18.5 | 1,200   |
+--------------+------+---------+------+---------+------+---------+
| Tadla        | 13.6 | 667     | 18.4 | 958     | 17.1 | 850     |
+--------------+------+---------+------+---------+------+---------+
| Loukkos      | 5.8  | 259     | 5.1  | 156     | 4.2  | 130     |
+--------------+------+---------+------+---------+------+---------+
| Moulouya     | 4.8  | 316     | 4.9  | 318     | 4.5  | 290     |
+--------------+------+---------+------+---------+------+---------+
|              | **59 | **      | **67 | **      | **58 | **      |
|              | .7** | 2,990** | .2** | 3,413** | .9** | 3,000** |
+--------------+------+---------+------+---------+------+---------+

> \* Gharb: Vicinity of Kenitra, Doukkala Vicinity of El Jadida, Tadla:
> Vicinity of Beni Mellal, Loukkos (Vicinity of Larach), and Moulouya
> (Vicinity of Oujda)

Source: Ministry of Agriculture / AgAtt forecast.

**Table 2. Sugar Cane Area Planted and Production (1,000 hectares, 1000
MT)**

+-------------+-------+----------+------+----------+------+----------+
|             | *     |          | **2  |          | **   |          |
|             | *2001 |          | 002/ |          | Fore |          |
|             | /02** |          | 03** |          | cast |          |
|             |       |          |      |          | 2    |          |
|             |       |          |      |          | 003/ |          |
|             |       |          |      |          | 04** |          |
+-------------+-------+----------+------+----------+------+----------+
| Region      | Area  | Pr       | Area | Pr       | Area | Pr       |
|             |       | oduction |      | oduction |      | oduction |
|             | Pl    |          | Pla  |          | Pla  |          |
|             | anted |          | nted |          | nted |          |
+-------------+-------+----------+------+----------+------+----------+
| Gharb       | 10.9  | 624      | 12.0 | 635      | 10.2 | 690      |
+-------------+-------+----------+------+----------+------+----------+
| Loukkos     | 4.2   | 314      | 3.1  | 264      | 4.3  | 300      |
+-------------+-------+----------+------+----------+------+----------+
| Total       | **1   | **939**  | **15 | **899**  | **14 | **990**  |
|             | 5.1** |          | .1** |          | .5** |          |
+-------------+-------+----------+------+----------+------+----------+

Source: Ministry of Agriculture / AgAtt forecast.

# 

# 

# Trade

Morocco will continue to rely heavily on imports to fulfill the local
demand for sugar. In recent years, Brazil has been by far the major
supplier of sugar cane to Morocco. The private company COSUMAR accounts
for most of imports of sugar in Morocco. Sugar imports consist virtually
all of raw sugar to be refined locally. A very small quantity of refined
sugar is imported directly at a high cost for sale in upscale
supermarkets in major cities.

The recently signed free trade agreement with the US could change
significantly the pattern of sugar consumption in Morocco. An estimated
120,000 MT of sugar consumption could be substituted, on the long term,
by corn derivatives (such as corn syrup). The anticipated decrease in
customs duties for corn is likely to make products of the corn
processing industry more competitive. Currently, there is a single mill
that processes about 50,000 MT of corn each year.

# Policy

The government continues to subsidize consumption at the retail level,
resulting in artificially low consumer prices. The GOM pays the sugar
refineries a subsidy of 2,000 dirhams/MT (about \$200) for refined sugar
regardless of the type of sugar (granulated, cubes, or cones) produced.
Consequently, the refineries are selling the refined sugar at an
artificially low level, which has boosted the per capita consumption of
sugar in Morocco.

## Privatization of Beet and Cane Plants

There are 13 sugar beet and sugar cane processing plants in Morocco, of
which 2 private plants process about one third of the sugar beet in
Morocco and belong to the same consortium that owns the major sugar
refinery in Morocco.

The privatization of the other sugar beet and cane processing mills has
been impeded primarily because of the low return of these mills, the
excessive number of employees, and the lack of political willingness to
make strategic and socially sensitive changes.

The GOM has merged some companies in order to improve their productivity
and made them more appealing to potential buyers, but the GOM has
announced no final agenda for privatization. Recently, the GOM has
approved a plan for restructuring a group of 4 sugar beet mills in the
area of Beni Mellal that are more prone to be privatized in the long
term.

## Sugar Crops are major pole of development in Morocco

The comparative advantage of growing sugar in Morocco has been subject
to criticism by numerous economic studies, and the wisdom of devoting
scarce water resources to sugar crops has been questioned by many
outside analysts. However, sugar crops have helped farmers to learn to
intensify their farming and boosted economic and social development
activities in El Jadida, Beni Mellal, Kenitra, and to a lesser extent
Larach and Berkane. Every year, during a period of 8 months, sugar crops
provide 90 to 100 days of work per hectares planted, for a population
that is mostly illiterate and has no or very few job alternatives. This
amounts to an estimated 8 million days of work. This is equivalent to
42,000 people working for 8 months, but the number of actual workers is
much greater, since many of the jobs are occasional and for shorter
periods. In fact, because of its impact on the local economy, during
years of water shortages, the GOM gives priority in its allocation plans
to sugar crops compared to other less labor intensive and less
integrated crops

**PSD Table: Sugar Beets (1000 HA)(1000 MT)**

**Country: Morocco**

+------------------------+-----+-----+----+------+----+-----+------+
|                        | **2 |     | ** |      | ** |     | UOM  |
|                        | 003 |     | 20 |      | 20 |     |      |
|                        | Rev |     | 04 |      | 05 |     |      |
|                        | ise |     | Es |      | Fo |     |      |
|                        | d** |     | ti |      | re |     |      |
|                        |     |     | ma |      | ca |     |      |
|                        |     |     | te |      | st |     |      |
|                        |     |     | ** |      | ** |     |      |
+------------------------+-----+-----+----+------+----+-----+------+
|                        | U   | P   | US | Post | US | P   |      |
|                        | SDA | ost | DA |      | DA | ost |      |
|                        |     |     |    | Esti |    |     |      |
|                        | Of  | Es  | Of | mate | Of | Es  |      |
|                        | fic | tim | fi |      | fi | tim |      |
|                        | ial | ate | ci | \[N  | ci | ate |      |
|                        |     |     | al | ew\] | al |     |      |
|                        | \   | \   |    |      |    | \   |      |
|                        | [Ol | [Ne | \  |      | \  | [Ne |      |
|                        | d\] | w\] | [O |      | [O | w\] |      |
|                        |     |     | ld |      | ld |     |      |
|                        |     |     | \] |      | \] |     |      |
+------------------------+-----+-----+----+------+----+-----+------+
| **Market Year Begin**  | 0   |     | 0  |      | 0  |     | MM/  |
|                        | 5/2 |     | 5/ |      | 5/ |     | YYYY |
|                        | 002 |     | 20 |      | 20 |     |      |
|                        |     |     | 03 |      | 04 |     |      |
+------------------------+-----+-----+----+------+----+-----+------+
| Area Planted           | 60  | 60  | 65 | 67   | 0  | 59  | (    |
|                        |     |     |    |      |    |     | 1000 |
|                        |     |     |    |      |    |     | HA)  |
+------------------------+-----+-----+----+------+----+-----+------+
| Area Harvested         | 59  | 59  | 63 | 65   | 0  | 57  | (    |
|                        |     |     |    |      |    |     | 1000 |
|                        |     |     |    |      |    |     | HA)  |
+------------------------+-----+-----+----+------+----+-----+------+
| Production             | 2   | 2   | 31 | 3400 | 0  | 3   | (    |
|                        | 986 | 986 | 00 |      |    | 000 | 1000 |
|                        |     |     |    |      |    |     | MT)  |
+------------------------+-----+-----+----+------+----+-----+------+
| TOTAL SUPPLY           | 2   | 2   | 31 | 3400 | 0  | 3   | (    |
|                        | 986 | 986 | 00 |      |    | 000 | 1000 |
|                        |     |     |    |      |    |     | MT)  |
+------------------------+-----+-----+----+------+----+-----+------+
| Utilization for Sugar  | 2   | 2   | 31 | 3400 | 0  | 3   | (    |
|                        | 986 | 986 | 00 |      |    | 000 | 1000 |
|                        |     |     |    |      |    |     | MT)  |
+------------------------+-----+-----+----+------+----+-----+------+
| Utilization for        | 0   | 0   | 0  | 0    | 0  | 0   | (    |
| Alcohol                |     |     |    |      |    |     | 1000 |
|                        |     |     |    |      |    |     | MT)  |
+------------------------+-----+-----+----+------+----+-----+------+
| TOTAL UTILIZATION      | 2   | 2   | 31 | 3400 | 0  | 3   | (    |
|                        | 986 | 986 | 00 |      |    | 000 | 1000 |
|                        |     |     |    |      |    |     | MT)  |
+------------------------+-----+-----+----+------+----+-----+------+

**PSD Table: Sugar Cane for Centrifugal (1000 HA)(1000 MT)**

**Country: Morocco**

+------------------------+------+------+---+-----+----+------+------+
|                        | **   |      | * |     | ** |      | UOM  |
|                        | 2003 |      | * |     | 20 |      |      |
|                        | R    |      | 2 |     | 05 |      |      |
|                        | evis |      | 0 |     | Fo |      |      |
|                        | ed** |      | 0 |     | re |      |      |
|                        |      |      | 4 |     | ca |      |      |
|                        |      |      | E |     | st |      |      |
|                        |      |      | s |     | ** |      |      |
|                        |      |      | t |     |    |      |      |
|                        |      |      | i |     |    |      |      |
|                        |      |      | m |     |    |      |      |
|                        |      |      | a |     |    |      |      |
|                        |      |      | t |     |    |      |      |
|                        |      |      | e |     |    |      |      |
|                        |      |      | * |     |    |      |      |
|                        |      |      | * |     |    |      |      |
+------------------------+------+------+---+-----+----+------+------+
|                        | USDA | Post | U | P   | US | Post |      |
|                        |      |      | S | ost | DA |      |      |
|                        | Offi | Esti | D |     |    | Esti |      |
|                        | cial | mate | A | Es  | Of | mate |      |
|                        |      |      |   | tim | fi |      |      |
|                        | \[O  | \[N  | O | ate | ci | \[N  |      |
|                        | ld\] | ew\] | f |     | al | ew\] |      |
|                        |      |      | f | \   |    |      |      |
|                        |      |      | i | [Ne | \  |      |      |
|                        |      |      | c | w\] | [O |      |      |
|                        |      |      | i |     | ld |      |      |
|                        |      |      | a |     | \] |      |      |
|                        |      |      | l |     |    |      |      |
|                        |      |      |   |     |    |      |      |
|                        |      |      | \ |     |    |      |      |
|                        |      |      | [ |     |    |      |      |
|                        |      |      | O |     |    |      |      |
|                        |      |      | l |     |    |      |      |
|                        |      |      | d |     |    |      |      |
|                        |      |      | \ |     |    |      |      |
|                        |      |      | ] |     |    |      |      |
+------------------------+------+------+---+-----+----+------+------+
| **Market Year Begin**  |      | 01/  |   | 0   |    | 01/  | MM/  |
|                        |      | 2002 |   | 1/2 |    | 2004 | YYYY |
|                        |      |      |   | 003 |    |      |      |
+------------------------+------+------+---+-----+----+------+------+
| Area Planted           | 14   | 11   | 1 | 12  | 0  | 10   | (    |
|                        |      |      | 4 |     |    |      | 1000 |
|                        |      |      |   |     |    |      | HA)  |
+------------------------+------+------+---+-----+----+------+------+
| Area Harvested         | 13   | 10   | 1 | 10  | 0  | 10   | (    |
|                        |      |      | 3 |     |    |      | 1000 |
|                        |      |      |   |     |    |      | HA)  |
+------------------------+------+------+---+-----+----+------+------+
| Production             | 939  | 939  | 9 | 900 | 0  | 990  | (    |
|                        |      |      | 5 |     |    |      | 1000 |
|                        |      |      | 5 |     |    |      | MT)  |
+------------------------+------+------+---+-----+----+------+------+
| TOTAL SUPPLY           | 939  | 939  | 9 | 900 | 0  | 990  | (    |
|                        |      |      | 5 |     |    |      | 1000 |
|                        |      |      | 5 |     |    |      | MT)  |
+------------------------+------+------+---+-----+----+------+------+
| Utilization for Sugar  | 939  | 939  | 9 | 900 | 0  | 990  | (    |
|                        |      |      | 5 |     |    |      | 1000 |
|                        |      |      | 5 |     |    |      | MT)  |
+------------------------+------+------+---+-----+----+------+------+
| Utilizatn for Alcohol  | 0    | 0    | 0 | 0   | 0  | 0    | (    |
|                        |      |      |   |     |    |      | 1000 |
|                        |      |      |   |     |    |      | MT)  |
+------------------------+------+------+---+-----+----+------+------+
| TOTAL UTILIZATION      | 939  | 939  | 9 | 900 | 0  | 990  | (    |
|                        |      |      | 5 |     |    |      | 1000 |
|                        |      |      | 5 |     |    |      | MT)  |
+------------------------+------+------+---+-----+----+------+------+

**PSD Table: Centrifugal Sugar (1000 MT)**

**Country: Morocco**

+-----------------------+------+------+----+-----+----+-----+------+
|                       | **   |      | ** |     | ** |     | UOM  |
|                       | 2003 |      | 20 |     | 20 |     |      |
|                       | R    |      | 04 |     | 05 |     |      |
|                       | evis |      | Es |     | Fo |     |      |
|                       | ed** |      | ti |     | re |     |      |
|                       |      |      | ma |     | ca |     |      |
|                       |      |      | te |     | st |     |      |
|                       |      |      | ** |     | ** |     |      |
+-----------------------+------+------+----+-----+----+-----+------+
|                       | USDA | Post | US | P   | US | P   |      |
|                       |      |      | DA | ost | DA | ost |      |
|                       | Offi | Esti |    |     |    |     |      |
|                       | cial | mate | Of | Es  | Of | Es  |      |
|                       |      |      | fi | tim | fi | tim |      |
|                       | \[O  | \[N  | ci | ate | ci | ate |      |
|                       | ld\] | ew\] | al |     | al |     |      |
|                       |      |      |    | \   |    | \   |      |
|                       |      |      | \  | [Ne | \  | [Ne |      |
|                       |      |      | [O | w\] | [O | w\] |      |
|                       |      |      | ld |     | ld |     |      |
|                       |      |      | \] |     | \] |     |      |
+-----------------------+------+------+----+-----+----+-----+------+
| **Market Year Begin** | **0  |      | *  |     | *  |     | MM/  |
|                       | 1/20 |      | *0 |     | *0 |     | YYYY |
|                       | 02** |      | 1/ |     | 1/ |     |      |
|                       |      |      | 20 |     | 20 |     |      |
|                       |      |      | 03 |     | 04 |     |      |
|                       |      |      | ** |     | ** |     |      |
+-----------------------+------+------+----+-----+----+-----+------+
| Beginning Stocks      | 247  | 247  | 2  | 268 | 2  | 268 | (    |
|                       |      |      | 38 |     | 30 |     | 1000 |
|                       |      |      |    |     |    |     | MT)  |
+-----------------------+------+------+----+-----+----+-----+------+
| Beet Sugar Production | 390  | 380  | 4  | 440 | 0  | 400 | (    |
|                       |      |      | 00 |     |    |     | 1000 |
|                       |      |      |    |     |    |     | MT)  |
+-----------------------+------+------+----+-----+----+-----+------+
| Cane Sugar Production | 100  | 90   | 1  | 90  | 0  | 90  | (    |
|                       |      |      | 00 |     |    |     | 1000 |
|                       |      |      |    |     |    |     | MT)  |
+-----------------------+------+------+----+-----+----+-----+------+
| TOTAL Sugar           | 490  | 470  | 5  | 530 | 0  | 490 | (    |
| Production            |      |      | 00 |     |    |     | 1000 |
|                       |      |      |    |     |    |     | MT)  |
+-----------------------+------+------+----+-----+----+-----+------+
| Raw Imports           | 508  | 568  | 5  | 500 | 0  | 520 | (    |
|                       |      |      | 20 |     |    |     | 1000 |
|                       |      |      |    |     |    |     | MT)  |
+-----------------------+------+------+----+-----+----+-----+------+
| Refined Imp.(Raw Val) | 3    | 3    | 2  | 0   | 0  | 0   | (    |
|                       |      |      |    |     |    |     | 1000 |
|                       |      |      |    |     |    |     | MT)  |
+-----------------------+------+------+----+-----+----+-----+------+
| TOTAL Imports         | 511  | 571  | 5  | 500 | 0  | 520 | (    |
|                       |      |      | 22 |     |    |     | 1000 |
|                       |      |      |    |     |    |     | MT)  |
+-----------------------+------+------+----+-----+----+-----+------+
| TOTAL SUPPLY          | 1248 | 1288 | 12 | 1   | 2  | 1   | (    |
|                       |      |      | 60 | 298 | 30 | 278 | 1000 |
|                       |      |      |    |     |    |     | MT)  |
+-----------------------+------+------+----+-----+----+-----+------+
| Raw Exports           | 0    | 0    | 0  | 0   | 0  | 0   | (    |
|                       |      |      |    |     |    |     | 1000 |
|                       |      |      |    |     |    |     | MT)  |
+-----------------------+------+------+----+-----+----+-----+------+
| Refined Exp.(Raw Val) | 0    | 0    | 0  | 0   | 0  | 0   | (    |
|                       |      |      |    |     |    |     | 1000 |
|                       |      |      |    |     |    |     | MT)  |
+-----------------------+------+------+----+-----+----+-----+------+
| TOTAL EXPORTS         | 0    | 0    | 0  | 0   | 0  | 0   | (    |
|                       |      |      |    |     |    |     | 1000 |
|                       |      |      |    |     |    |     | MT)  |
+-----------------------+------+------+----+-----+----+-----+------+
| Human Dom.            | 1010 | 1020 | 10 | 1   | 0  | 1   | (    |
| Consumption           |      |      | 30 | 030 |    | 030 | 1000 |
|                       |      |      |    |     |    |     | MT)  |
+-----------------------+------+------+----+-----+----+-----+------+
| Other Disappearance   | 0    | 0    | 0  | 0   | 0  | 0   | (    |
|                       |      |      |    |     |    |     | 1000 |
|                       |      |      |    |     |    |     | MT)  |
+-----------------------+------+------+----+-----+----+-----+------+
| Total Disappearance   | 1010 | 1020 | 10 | 1   | 0  | 1   | (    |
|                       |      |      | 30 | 030 |    | 030 | 1000 |
|                       |      |      |    |     |    |     | MT)  |
+-----------------------+------+------+----+-----+----+-----+------+
| Ending Stocks         | 238  | 268  | 2  | 268 | 0  | 248 | (    |
|                       |      |      | 30 |     |    |     | 1000 |
|                       |      |      |    |     |    |     | MT)  |
+-----------------------+------+------+----+-----+----+-----+------+
| TOTAL DISTRIBUTION    | 1248 | 1288 | 12 | 1   | 0  | 1   | (    |
|                       |      |      | 60 | 298 |    | 278 | 1000 |
|                       |      |      |    |     |    |     | MT)  |
+-----------------------+------+------+----+-----+----+-----+------+

**Import Trade Matrix: Centrifugal Sugar**

Country: Morocco

  -------------------------- ----------- --------------------- -----------
  Time Period                 CY         Units:                MT

  Imports for:               2002                              **2003**

  U.S.                                   U.S.                   

  Others                                 Others                

  Brazil                     542661      Brazil                441000

  South Afr.Rep              25000       Guatemala             30000

                                         South Afr.Rep         29000

                                                                

                                                                

                                                                

                                                                

                                                                

                                                                

                                                                

  Total for Others           567661                            500000

  Others not Listed                                             

  Grand Total                567661                            500000
  -------------------------- ----------- --------------------- -----------