The Moroccan government will extend the current soft wheat subsidy program until December 31, the state grain agency ONICL announced on Monday. This means that the country, which is suffering from a drought, will have to import all year.

ONICL, citing a decision of Morocco's Finance and Agriculture Ministries, said in a website statement that a new round subsidy for importers will run from May 1, to December 31, details to follow.

Authorities had announced an incentive programme that would run until the end of April.

In order to maintain the supply, the programme will continue until 2025. In the past, Morocco has closed its market for imports during good harvest years in order to protect domestic supplies.

Morocco imported a lot of wheat in the last two years, after a prolonged drought caused successively poor crops. Morocco's soft wheat, barley, and durum production was down 43% from the previous year.

The country is now a major exporter of wheat to the European Union, and increasingly, Russia.

ONICL said that importers would receive subsidies from April 1 to December 31 if they hold soft wheat stocks. (Reporting and editing by Jan Harvey; Ahmed Eljechtimi and Gus Trompiz)

(source: Reuters)