December 28, 2011 / 3:03 PM / in 7 years

UPDATE 1-Morocco extends duty exemption on wheat imports

(Adds details, importer’s reaction, background)

RABAT, Dec 28 (Reuters) - Morocco has extended a suspension of import duties on soft wheat and durum wheat by two months until the end of February amid a drop in stocks, a customs authority spokesman said on Wednesday.

A cabinet meeting adopted a decree for the extension, the spokesman said.

“Basically we will continue to exempt soft and durum wheat imports from custom duties until the end of February to ensure adequate supplies in the domestic market amid a decline in local wheat stocks,” he said by telephone.

A decree approved by the government in October suspended import duties on soft wheat imports between Nov. 15 and Dec. 31 and on durum between Oct. 1 and Dec. 31, 2011.

Prior to that, Morocco applied an import tariff of 135 percent for soft wheat and 80 percent on durum.

State grains authority ONICL last week said soft wheat stocks should close the year at a record 1.6 million tonnes, or enough to cover four months of milling needs.

Local millers, traders and silos collected almost half, or 2.1 million tonnes, the soft wheat that was produced in the 2011 farming campaign, ONICL said.

The majority of cereal-planted areas in Morocco are small properties owned by farmers who use the crop for their own subsistence.

A Casablanca-based importer welcomed the extension of the duty exemption and said ONICL’s estimate on the sufficiency of the wheat stocks does not take into account the mixed quality of domestic wheat.

“Stocks, which are made of both imported and domestic wheat, should cover around two months of milling needs. The bulk of the stocked domestic wheat is of poor quality that needs to be cut with an increasing amount of imported wheat to yield a bakable mix,” said the importer, on condition of anonymity.

ONICL’s head Abdelali Aziz and other officials at the authority could not be reached for immediate comment.

Morocco also applies preferential tariffs under trade agreements with the United States and the European Union, but tenders held since late August to import U.S. soft wheat and durum failed to attract any bids.

Reporting by Souhail Karam, editing by Jane Baird and Jason Neely

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