Required Report - public distribution

**Date:** 10/28/2004

**GAIN Report Number:** MO4019

MO4019

**Morocco**

**Citrus**

**Annual**

**2004**

**Approved by:**

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

U.S. Embassy, Rabat, Morocco

**Prepared by:**

Aziz Abdelali

**Report Highlights:**

Morocco\'s citrus production is expected to increase moderately this
year due to alternate bearing. The largest citrus producing area in
Morocco in the south (Souss) is threatened by locust invasion and the
government is devoting considerable resources to locusts control.

FRUMAT, the sole citrus concentrate producer in Morocco is about to
close down and processing is forecast to be negligible.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

Rabat \[MO1\]

\[MO\]

Table of Contents

[Executive Summary 3](#executive-summary)

[Trade 4](#trade)

[Shipments to U.S.A. 4](#shipments-to-u.s.a.)

[Policy - No change 5](#policy---no-change)

[Processed Citrus 5](#processed-citrus)

# Executive Summary

First estimates of Morocco's citrus production for 2004/2005 indicate a
moderate increase in production and exports especially for mid-season
and late orange varieties. The increase is attributed to the alternate
bearing nature of the citrus trees.

The productions figures have to be handled with caution. The estimates
are issued by the Moroccan citrus producers' Association (ASPAM) and are
believed to be mostly subjective. In addition, estimates of production
of late varieties (oranges) could change significantly depending on
prevailing weather conditions during winter and early spring.

Recently (October 2004), swarms of locust have been reported in parts of
the southern citrus producing area (Souss-Massa vicinity of Taroudent
and Tiznit), which accounts for over half of Morocco's citrus
production. So far, minor damages have been reported but the threat is
real and the government organized press conferences to inform the
population about the threat. The situation is still evolving and the
government is allocating over \$40 million control the locust invasion
in Morocco.

####### Morocco's fresh citrus production and exports

**(Thousands of metric tons)**

+-----------------+-----------+-----------+---+-----------+-----------+
|                 | **P       |           |   | **Exports |           |
|                 | roduction |           |   | ^(b)^**   |           |
|                 | ^(a)^**   |           |   |           |           |
+-----------------+-----------+-----------+---+-----------+-----------+
|                 | **20      | **20      |   | **20      | **20      |
|                 | 03/2004** | 04/2005** |   | 03/2004** | 04/2005** |
+-----------------+-----------+-----------+---+-----------+-----------+
| **Varieties**   | **Rev.**  | *         |   | **Rev.**  | *         |
|                 |           | *Forec.** |   |           | *Forec.** |
+-----------------+-----------+-----------+---+-----------+-----------+
|                 |           |           |   |           |           |
+-----------------+-----------+-----------+---+-----------+-----------+
| # Oranges       | **704.5** | **813.0** |   | **237.2** | **290.7** |
+-----------------+-----------+-----------+---+-----------+-----------+
| Maroc Late      | 397.0     | 463.0     |   | 176.4     | 200.0     |
+-----------------+-----------+-----------+---+-----------+-----------+
| Navels          | 220.0     | 249.0     |   | 13.3      | 23.0      |
+-----------------+-----------+-----------+---+-----------+-----------+
| Bloody oranges  | 45.0      | 49.0      |   | 22.7      | 34.0      |
+-----------------+-----------+-----------+---+-----------+-----------+
| Salutiana       | 37.5      | 46.5      |   | 24.0      | 30.7      |
+-----------------+-----------+-----------+---+-----------+-----------+
| Others          | 5.0       | 5.5       |   | 0.8       | 3.0       |
+-----------------+-----------+-----------+---+-----------+-----------+
|                 |           |           |   |           |           |
+-----------------+-----------+-----------+---+-----------+-----------+
| **Small Citrus  | **408.0** | **442.9** |   | **199.7** | **230.3** |
| Fruit**         |           |           |   |           |           |
+-----------------+-----------+-----------+---+-----------+-----------+
| Clementine      | 300.0     | 326.0     |   | 142.4     | 152.5     |
+-----------------+-----------+-----------+---+-----------+-----------+
| Nour            | 54.0      | 67.0      |   | 36.8      | 53.6      |
+-----------------+-----------+-----------+---+-----------+-----------+
| Ortanique       | 19.5      | 17.2      |   | 8.8       | 9.0       |
+-----------------+-----------+-----------+---+-----------+-----------+
| Afourer         | 16.0      | 14.2      |   | 7.4       | 8.1       |
+-----------------+-----------+-----------+---+-----------+-----------+
| Nova            | 12.0      | 12.5      |   | 1.9       | 6.3       |
+-----------------+-----------+-----------+---+-----------+-----------+
| Fortune         | 1.0       | 1.0       |   | 0.4       | 0.5       |
+-----------------+-----------+-----------+---+-----------+-----------+
| Others          | 5.5       | 5.0       |   | 2.0       | 0.3       |
+-----------------+-----------+-----------+---+-----------+-----------+
|                 |           |           |   |           |           |
+-----------------+-----------+-----------+---+-----------+-----------+
| **Other         | **25.2**  | **30.0**  |   | **0**     | **0.4**   |
| Citrus**        |           |           |   |           |           |
+-----------------+-----------+-----------+---+-----------+-----------+
|                 |           |           |   |           |           |
+-----------------+-----------+-----------+---+-----------+-----------+
| **Total         | **        | **        |   | **436.8** | **521.4** |
| Citrus**        | 1,137.7** | 1,285.9** |   |           |           |
+-----------------+-----------+-----------+---+-----------+-----------+

-   Notes: Production estimates are from the Producers Association,
    ASPAM. Estimates have been more accurate for the early production
    varieties as the weather during the coming months might affect
    considerably estimates for late varieties (especially Maroc-Late).

-   Trade Figures: Data are from the EACCE office. They may differ from
    the official figures (used in PS&D tables) but are more timely and
    thus used as first estimates.

In the long term, citrus production is not expected to increase
significantly in spite of the government and farmers organization
ambitious plans to expand planted area, reconvert to new varieties, and
replace old orchards. Souss producers face serious water shortages that
increase their cost of production considerably. In the Gharb area
(vicinity of Kenitra) the orchards trees are old and most growers are
not actively replanting orchards. So, although, there might be an
increase in planting in some years, the average yearly planting over a
long period has been below what was initially planned to maintain
adequate growth of citrus production. Eventually, the low planting
suggests that Morocco might be unable to even fulfill the increasing
local demand for some varieties of citrus in the future.

# 

# 

# Trade

Exports of citrus are expected to increase to reflect the anticipated
moderate increase in Morocco's production this year. Russia has been the
major outlet for Morocco's Clementines and oranges. The traditional EU
countries (taken as a group) will continue to be the main outlet for
Morocco in spite of the downward trend over the past few years. The
proximity of this market, the high prices paid by European consumers,
and more importantly, the preferential access given to Moroccan citrus
fruit under the Morocco-EU free trade agreement (see MO0028) are
appealing to Moroccan exporting groups. The non- EU markets, commonly
known in Morocco as \"Contract Markets\", include Russia, Saudi Arabia,
and Canada account each year for over a third of Morocco's fresh citrus
exports. For these markets, each year, arrangements are made between
importers and Moroccan exporters to ship agreed-upon quantities and
quality of fruit.

Long-term prospects for fresh citrus exports are grim: Local production
can hardly keep up with the increasing demand from both export and local
markets. Morocco did not fill the duty-free quota granted by the EU for
Clementines (168,000 MT) and Oranges (326,000 MT). Prices in the local
market have reached a level so that many farmers see a benefit in
selling to the local market and avoid risks and delays in payment when
exporting. Also, the decline in the EU share in Morocco's agricultural
exports indicate that some exporting groups have more difficulties to
comply with increasingly complex EU industry standards and requirements.
This explains partly why more emphasis has been given in recent years to
exporting to non-EU countries. The Eastern-European markets in
particular (Russia) have been generally buying lower quality, cheaper
fruit that are less suitable for the EU market.

## Shipments to U.S.A.

Moroccan exporters typically don't view U.S.A. market as a priority.
Shipment of Moroccan citrus (mostly Clementines) to the U.S.A. will
continue to fluctuate reflecting the change in local production and
should not show any significant long-term trend unless there is a major
change in production policy. MO3021 provides details on constraints
faced by Moroccans when looking at the U.S.A. market.

**Exports of Fresh Citrus to USA (1,000 MT)**

+-------------------+-------------------+-----------------+-----------+
| Marketing Year    | Exports to USA    | Total Exports   | U.S.A. as |
|                   |                   |                 | %         |
|                   |                   |                 |           |
|                   |                   |                 | of Total  |
+-------------------+-------------------+-----------------+-----------+
| 99/00             | 2.5               | 596.7           | 0.4       |
+-------------------+-------------------+-----------------+-----------+
| 00/01             | 0.7               | 391.8           | 0.2       |
+-------------------+-------------------+-----------------+-----------+
| 01/02             | 3.7               | 430.0           | 0.9       |
+-------------------+-------------------+-----------------+-----------+
| 02/03             | 13.5              | 483.8           | 2.8       |
+-------------------+-------------------+-----------------+-----------+
| 03/04             | 2.7               | 436.6           | 0.6       |
+-------------------+-------------------+-----------------+-----------+

Note: \* Mostly Small Citrus Fruit (Clementines).

# Policy - No change

# Processed Citrus

FRUMAT, the sole citrus concentrate producer in Morocco and, by far, the
major producer has never been in such a weak position. Last year, FRUMAT
processed only 2,000 MT (less than 1 percent of its nominal capacity)
because of high prices for fruit in the local market. FRUMAT has been
struggling to increase farmer's deliveries to its processing plants but
the high demand in the local market combined with relatively lower
supply resulted in prices in the fresh market that are far more
appealing to farmers. The state owned farms that FRUMAT was hopping to
contract to ensure reliable supply are being leased to the private
sector (including foreign investors) which reduces further the companies
ability to position itself in the market. Eventually, Morocco is likely
to become a net import of single strength juice and concentrate for its
local industry.

Unless there is a major government financial intervention for FRUMAT,
the company is likely to close. Also, if in the next few years, Morocco
experiences large citrus crops, FRUMAT could be revitalized to help
absorb the excess in production.

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