Moroccan importers buy South American wheat: traders
PARIS (Reuters) - Private importers in Morocco bought this month between 300,000 tonnes and 400,000 tonnes of South American wheat, mostly from Argentina, to take advantage of attractive prices as the country faces a drought-hit domestic crop, European traders said.
The importers paid between $285 a tonne and $292 a tonne, including cost and freight (C&F), for the wheat for shipment in March and April, the traders said.
Between the start of its crop season on June 1, 2011 and the end of February 2012, Morocco imported 1.64 million tonnes of soft wheat, including 1 million tonnes from France, 400,000 tonnes from South America and 200,000 tonnes from the Black Sea region, traders said, citing official data.
Earlier this month South American wheat was about $20 a tonne cheaper C&F than wheat from France, usually the main supplier to Morocco, the traders said, adding this price advantage had since narrowed to about $10 a tonne.
"Given the current spread between French and South American prices, the share of South American wheat imports is going to increase," one trader said.
A cargo of 31,000 tonnes of wheat for Morocco is due to load later this month at the Argentine port of Campana, according to shipping data.
Forecasts are for Morocco's grain crop to fall by half compared to last year due to drought, and the government has suspended import duties on soft wheat, durum and barley.
Traders are expecting Morocco to extend the freeze on soft wheat duties, which currently runs until the end of April, until mid- or end-May, or start next season's imports earlier than normal, as the country tries to cover the looming shortfall in domestic production.
Some operators said about 100,000 tonnes of the wheat bought from South America this month involved the cancellation of earlier deals to buy French wheat.
But South American competition would not hit prices in France given that the European Union's top wheat producer has limited supply for the rest of the season, traders added.
The Moroccan government said at the start of March it expected soft wheat imports of between 1 million and 1.1 million tonnes in March-May, and traders said this volume could reach 1.25 million tonnes.
South American wheat has won a series of sales in North Africa since the end of 2011 as it proved competitive in the face of rising prices and falling availability of European and Black Sea wheat.
The region was seen as best placed to supply 300,000 tonnes of optional-origin wheat purchased by Algeria on Wednesday.
Argentine wheat was thought less likely to be chosen by Algeria after it rejected cargoes on quality grounds earlier this season, but this was not expected to occur in Morocco.
"Unlike Algeria, which has had issues this year with South American wheat, what matters above all for Morocco is the price," another trader said.
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