Morocco set to become top wheat importer as domestic shortage persists, global production dips

Morocco, poised to become one of the world’s top six wheat importers in 2024, is expected to see a drastic production drop of nearly 40% compared to last year, according to a recent report by the United Nations Food and Agriculture Organization (FAO).

This translates to a below-average harvest of just 2.5 million tonnes, a stark contrast to previous years. 

Neighboring Algeria is also facing challenges, with production predicted to remain stagnant at similar levels to the drought-stricken harvest of 2023. 

Only eastern Tunisia offers a glimmer of hope, with a slight upturn anticipated following their multi-year low in 2023.

The report forecasts a significant decline in wheat output across the region due to unfavorable weather conditions.

This decline in North African production is expected to fuel a surge in import demand across the continent. Africa’s total wheat purchases are projected to rise by 2.2%, reaching a record high of 55.6 million tonnes.

Morocco is expected to be the key driver behind this increase, with imports potentially jumping by 19% to compensate for the shortfall in domestic production.

The global picture for wheat production isn’t much brighter. The FAO forecasts a marginal decrease of 0.1% from the previous season, bringing the total down to 787 million tonnes. 

This downturn is primarily attributed to production declines in key regions, including the European Union, Ukraine, Turkey, the United Kingdom, and Morocco. 

Recent adverse weather conditions in the Black Sea region are also likely to contribute to this global decrease.

Despite these production concerns, there’s a silver lining in terms of pricing. 

International wheat export prices have been steadily declining throughout the 2023/24 season, reflecting ample global supplies and fierce competition among exporters, particularly from the Russian Federation. 

As a result, wheat prices are currently lower than both last year’s levels and the five-year average.

Looking ahead to the 2024/25 season, expectations point towards continued downward pressure on wheat markets. 

This is fueled by anticipated reductions in global wheat consumption and larger harvests in major exporting countries. With these factors at play, consumers can expect some relief on wheat prices in the coming year.