Casablanca – The Moroccan government has decided to extend its support for soft wheat imports until the end of April 2026, a move aimed at ensuring food security and maintaining stability in the domestic grain market during the early months of the year. The measure applies to soft wheat intended for industrial milling and covers imports carried out between January and April.

The decision is implemented through a reimbursement mechanism at the time of import, targeting professionals operating in the industrial milling sector. It follows a joint decision by the ministries responsible for finance and agriculture and is administered through the National Interprofessional Office for Cereals and Pulses. Authorities view the extension as a necessary response to ongoing structural constraints affecting national wheat production.

Persistent dependence on imports

Soft wheat remains the most widely consumed cereal in Morocco and a central component of daily food consumption, particularly through bread and flour-based products. Despite continued efforts to strengthen domestic agricultural output, national production levels remain insufficient to fully meet the demand of industrial mills. This gap has been accentuated in recent years by climate variability, irregular rainfall, and rising production costs.

As a result, Morocco continues to rely heavily on international markets to secure adequate quantities of soft wheat. The extension of import support reflects the government’s assessment that uninterrupted access to global supply chains remains essential to prevent shortages and limit volatility in the domestic market.

Structure of the support mechanism

Under the current framework, the state grants a flat-rate subsidy to importers based on the difference between the average cost of imported soft wheat at port exit and a fixed reference price set at approximately $27.84 per quintal. This benchmark serves as a stabilizing anchor in the calculation of public support.

The average cost used in the subsidy formula is derived from international market data and reflects prices from multiple countries of origin. In practice, calculations are based on two selected sources per assessment period, with major suppliers including European and American producers as well as South American exporters. This approach is designed to ensure a balanced reflection of global market trends while reducing exposure to price distortions linked to a single supplier.

The level of the subsidy varies from month to month, depending on movements in international prices, transportation costs, and broader market conditions. When global prices rise above the reference level, the state compensates importers for part of the difference. When prices decline, the subsidy is automatically reduced.

Monthly Oversight and Adjustments

The reimbursement system is overseen by a technical committee composed of representatives from the ministries in charge of agriculture and finance, along with the National Interprofessional Office for Cereals and Pulses. The committee meets at the beginning of each month to determine the flat-rate subsidy applicable for the following month.

This governance structure allows authorities to closely monitor global market developments and adjust support levels accordingly. It also ensures coordination between public institutions and market operators, contributing to greater predictability for importers and millers.

Evolution of support levels

Data from previous periods illustrate the flexible nature of the mechanism. During the first four months of last year, the flat-rate subsidy provided to importers ranged between approximately $0.72 and $1.44 per quintal, reflecting higher international prices at the time. As global soft wheat prices improved in subsequent months, the level of public support declined sharply, falling to less than $0.10 per quintal.

This adjustment demonstrated the system’s capacity to respond dynamically to market conditions and to limit fiscal exposure when international prices ease. Rather than functioning as a permanent subsidy, the mechanism acts as a buffer against sudden price shocks.

Protecting consumers and purchasing power

Beyond supply considerations, the extension of import support is closely linked to social and economic stability. Bread and wheat-based products account for a significant share of household food expenditure, particularly among lower-income groups. Sharp increases in flour prices could quickly translate into higher consumer prices, with direct implications for purchasing power.

By supporting imports during periods of tighter supply or higher global prices, the government seeks to stabilize the domestic market and ensure regular availability of flour for bakeries and food processors. While the subsidy is directed at importers and milling companies, its broader objective is to prevent disruptions along the supply chain that could affect end consumers.

Short-term support, long-term challenges

The extension of support until April 2026 is widely seen as a short-term measure addressing immediate market needs. However, it also underscores longer-term challenges facing the agricultural and food security strategy. Climate risks, international market volatility, and geopolitical uncertainty continue to shape global grain markets, increasing exposure for import-dependent countries.

In this context, authorities view the reimbursement mechanism as one component of a broader policy mix that includes efforts to improve agricultural productivity, strengthen storage infrastructure, and diversify sources of supply. For the time being, however, ensuring stable access to soft wheat remains a priority.

As international markets evolve in the coming months, the effectiveness of the import support program will depend on its continued flexibility and responsiveness. The monthly adjustment process suggests that policymakers aim to strike a balance between fiscal discipline and the need to safeguard food security and market stability in an uncertain global environment.