Agriculture

Morocco can weather storm of fruit and vegetable shortage

March 8, 2023, 1:01 PM

Morocco vegetable exports — Prices have climbed rapidly during a foreign currency crisis that has triggered three devaluations since March 2022

Drought and cold winter impacted country’s tomato harvest
Government stopped export permits to protect domestic market
World Bank predicts GDP growth despite setback

Recent adverse growing conditions in Morocco have caused shortages of some fruit and vegetable produce in European supermarkets, particularly in the UK, but the impact will not dent economic growth in the North African country this year, the World Bank said.

British supermarkets last month introduced rationing of some popular produce as a result of a drop in imports from major source markets such as Morocco and Spain.

The shortfall was the result of drought and cooler temperatures this winter impacting the harvest of items such as tomatoes, resulting in a drop in the amount of produce exported to overseas markets.

“The trade between Morocco and the EU is quite open and easy, although Moroccan producers still need some paperwork arranged before they can send their trucks to (Spanish port) Algeciras,” Tom Weber, a Spain-based independent trader in fruit and vegetables who specialises in importing produce to the EU, told AGBI.

“Last month, the government suddenly stopped issuing these export permits, so the goods could not leave the country.”

The Rabat government’s aim in banning exports was to bolster supplies to the local market so that domestic produce prices, especially for tomatoes, would fall.

Morocco’s winter started mild before a prolonged cold spell ravaged fruit and vegetable crops.

“Local tomato prices have soared – the same happened last year ahead of Ramadan, so the government limited exports at that time too,” Weber said.

This year, the government stopped exports abruptly, before starting to give quotas so that farmers could export 20-50 percent of their produce and sell the remainder domestically.

Some UK supermarkets had empty shelves in the vegetables section due to Morocco halting exports. Picture: Reuters/Toby Melville

“The situation is easing a bit, it’s not as bad as it was,” said Weber. “As importers to the EU, we have contracts with retailers and food processing companies, and that first week we had to cut a lot of orders.

“Produce prices in Morocco are increasing again ahead of Ramadan and producers are afraid the government will ban exports again. There’s still a lot of tension on the market.

“We veer from being able to import everything to nothing, and then quota limits. It’s unclear from one day to the next. My partners in Morocco invested a lot of money in a new packing house to meet the food safety certificates to export to the EU and UK and then the government halts exports. Such uncertainty will deter investment in the future,” Weber warned.

Despite the uncertainty, the World Bank predicts that economic growth in Morocco will remain strong overall this year.

It said GDP growth would accelerate to 3.1 percent in 2023, following a post-pandemic rebound.

The World Bank said Morocco’s real GDP growth dropped from 7.9 percent in 2021 to an estimated 1.2 percent last year, while the current account deficit increased from 2.3 percent to 4.1 percent of GDP.

In a bid to reduce the impact of rising costs on poorer Moroccan households, the government introduced a support package including general subsidies on food staples and maintained pre-existing regulated prices.

“Recent measures to counter supply shocks and preserve the purchasing power of Moroccan households have cushioned the impact to a significant extent and prevented more people from falling into poverty,” said Jesko Hentschel, World Bank country director for Morocco.

“The planned roll-out of the family allowance system will allow Morocco to effectively target the vulnerable population in a cost-effective and equitable manner to address price hikes of this magnitude.”

The food shortages in Europe have not been a factor in the UAE, despite the Gulf state being heavily dependent on outside countries for the majority of its food sources.

“We are not experiencing the same issues fortunately. We have a diverse supplier base from all over the world to draw upon,” said a spokesperson from Spinneys, one of the UAE’s largest supermarket chains.