By Ahmed Eljechtimi
RABAT, Dec 27 (Reuters) - Morocco will suspend the customsduty on soft wheat for four more months until April 30, 2019, tomaintain price stability and ensure regular supply, a governmentspokesperson said on Thursday.
The government has acted to maintain the import price ofsoft wheat at 260 Moroccan dirhams per quintal and as a socialmeasure, Mustapha El Khalfi said at a weekly press briefing.
Morocco had announced in October that it would impose a 30percent customs duty starting on January 1.
The suspension of the duty comes amidst market instabilitydue to low production in the main wheat producing countries andnotably lower offer from the Black Sea area.
"Keeping such a duty would trigger a surge in wheat pricesof up to 300 dirhams per quintal," Khalfi said.
Wheat supply is key to Morocco's stability as bread andsemolina are staples for the population of about 35 million.
The extended suspension will be published in the officialbulletin before January 1, Khalfi added.
As of Dec. 1, reserves of soft wheat stood at 1.43 milliontonnes, enough to cover 3.7 months of millers' needs, he said.
"Suspending the customs duty is a wise decision," ChakibAlj, head of Morocco's millers federation (FNM) said.
"Let's hope that prices will not rise in the internationalmarket which would push Morocco to spend more on subsidisingsoft wheat," he told Reuters by phone.
Morocco's agriculture ministry announced this year anexceptional harvest of 10.3 million tonnes, including 4.91million tonnes of soft wheat, 2.42 million tonnes of hard wheatand 2.92 million of barley.
But in October, it reported a slow pace in the collection ofthe local harvest.
French wheat exporters estimated Morocco's soft wheat importneeds at 3 million tonnes in the 2018-19 season.
Morocco said in its 2019 draft budget it will spend 17.67billion dirhams on subsidies of wheat prices along with sugarand cooking gas, up 4.65 billion dirhams from 2018.
(Reporting by Ahmed Eljechtimi; Editing by Toby Chopra andAlexandra Hudson) ((ahmed.eljechtimi@thomsonreuters.com;))
