Imminent impact on the Moroccan market

Imminent impact on the Moroccan market

In June 2023, world grain and oil prices continued to decline steadily, according to the latest data from the Food and Agriculture Organization of the United Nations (FAO). However, these prices remain at very high levels in the domestic markets of the poorest countries.

The FAO Food Price Index, which measures the monthly change in international prices of basic foodstuffs, continued to decline in June, registering a decrease of 1.4% compared to the previous month.

The main drop was seen in wheat prices, which fell 1.3% due to the large Russian supply and the reduction in export taxes. The price of sugar also fell 3.2% after four months of increases according to the same data.

Thus, the FAO predicts a drop in cereal production in the 44 low-income countries suffering from food deficits, which underlines an increase in their import needs.

The FAO has also found that the fall in world prices of certain food products has not fully passed through to the domestic markets of these countries, raising the same question for Moroccan markets. These markets have experienced many fluctuations since the previous year, particularly due to the drought and the outbreak of war in Ukraine.

In Morocco, the latest data provided by the High Commission for Planning (HCP) confirms a real drop of 0.4% in the consumer price index in May 2023 compared to the previous month, supported by a slight drop in 0.8% of the food price index.

During this period, the decreases in foodstuffs recorded by the HCP affected vegetables (-7.9%), fish and seafood (-7%), milk, cheese and eggs (-0, 6%), bread and cereals (-0.4%), as well as oils and fats, as well as coffee, tea and cocoa (-0.1%).

Ahmed Azirar, economic expert and research coordinator at Morocco’s Institute for Strategic Intelligence, said the impact of the continued decline in global staple food prices on prices in Morocco is inevitable, but it will be delayed. He notes that Morocco imports a large quantity of basic food products and that most imports are made on the basis of fixed-term contracts.

In a statement to MoroccoLatestNews, Azirar underscored the need to factor in service fees that add to product prices (including shipping, insurance, etc.), which remain high.

A third crucial element in determining product prices should not be overlooked, namely the problem of distribution chains that are not fully structured.“, he explained, before clarifying that it will take some time before the global drop in food prices and its indicators are reflected in the local prices of imported food products in Moroccan markets.


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