Morocco's decision to resume subsidies for soft wheat imports from September 16 to December 31 is expected to revitalize European wheat markets, which have experienced significant fluctuations attributed to the ongoing Russia-Ukraine crisis. In early July, the market was notably under pressure, as indicated by the Irish Farmers' Association, due to the commencement of wheat harvesting in the Northern Hemisphere, improved production forecasts, and a surplus of global supplies and stocks. On July 1, the prices in the French international market for futures contracts reached approximately €209.50 per ton.
However, the situation shifted in the latter half of July, as tensions in the Black Sea region and disruptions in exports from Russia and Ukraine led to a resurgence of geopolitical risk premiums. Consequently, prices temporarily surged to €247 per ton, marking the highest level since May 2024, before retracting to a range of €229–232 by July 24. As August began, prices faced renewed pressure, with market data indicating a drop of approximately €27 per ton from the peak, leading to a downward trend towards €217 per ton, although some recovery was noted subsequently.
On August 11, speculation regarding a potential ceasefire between Russia and Ukraine resulted in a decline of the September contract to €215 per ton, the lowest level in a month. Subsequently, prices rebounded following reports of damage to key Russian facilities. By August 13, the September contract was priced around €225, while December contracts reached €234.
In the final week of July, disturbances in the Black Sea transitioned from being a supportive factor for prices to a genuine concern for supply chains. According to Reuters, the ongoing attacks from both Russian and Ukrainian forces on ports and grain facilities have disrupted or delayed critical shipments, prompting global buyers to seek alternative sources. At the beginning of this week, Moscow announced measures aimed at mitigating the impact of these attacks on Russian grain exports, following the closure and disruption of facilities and shipments in the Black Sea region.
Morocco plays a significant role in the European wheat market. An analysis by the platform MarineLink titled “Morocco Will Import Less Wheat, Causing Uncertainty For EU Wheat Exporters” highlighted that Morocco suspended soft wheat imports during June and July, creating uncertainty for European wheat exporters. Previously, Morocco was a major market for European wheat, particularly from France. In contrast, France has struggled to find alternative markets of comparable size, especially given the limited access to the Algerian market and fierce competition from the Black Sea region.
Abdelkader El Aloui, President of the National Federation of Mills in Morocco, stated to Hespress that “the implementation of the subsidy will initially be allocated to vessels that will commence shipping from September 16 until December 31 of this year.” He added that the continuation or cessation of support beyond this period will depend on developments in international wheat prices.
As reported by hespress.com.
