The Futures Market for cereal imports in Morocco

Commodity futures markets are significantly expanding worldwide. The interest of these markets is underlined upon the discovery and management of price risk. Based on collected field data, this paper describes the place of these markets in current Moroccan cereal imports. The survey results show that access to hedging instruments is still limited and does not exceed 26% of importing companies and concerns mainly traders and some grain collectors. Traders hedge almost 83% of their physical positions for maize and 75% for soft wheat (2015-2018 average) while the positions of grain collectors in the futures market are 46% for maize and 42% for soft wheat. Thus, the use of futures contracts is not systematic. Furthermore, we estimate that only 1% of the imported volume is hedged by buying option contracts and 10% are hedged on future contracts. Traders hedge more than 78% of their physical market positions through the purchase (or sale) of futures contracts. They hedge nearly 47% of their positions on the physical market through option contracts and nearly 32% of their positions on futures contracts. Faced with this situation, several measures can be applied to review the costs and documents required for hedging operations and to improve the visibility for Moroccan cereal importers.

Keywords: futures markets, hedging, cereals import