Morocco’s Phosphate Exports Continue Impressive Growth in 2022

Rabat – Morocco’s phosphate and derivatives exports rose in value by nearly 67% at the end of September 2021, going from MAD 55 billion ($5 billion) to MAD 99 billion ($9 billion), according to official data.

The rise in Morocco’s phosphate exports is largely supported by the exponential growth in demand for fertilizer coupled with the rise in fertilizer prices.

To meet demand, Morocco’s phosphate giant OCP announced this year that it plans to bolster its production by 10% in 2022.

OCP plans to increase fertilizer production output to 11.9 million tonnes in 2022, up from 10.8 million tonnes the year before.

The company further plans to increase production by 3 million tonnes in 2023, according to a statement from an OCP executive quoted by Reuters.

The war in Ukraine continues to put significant pressure on the international fertilizer market, as western sanctions are constraining access to Russian ammonia, a key ingredient in the manufacturing of fertilizer. OCP sourced half of its ammonia supplies from Russia before the war in Ukraine.

According to for-profit US rating agency Fitch, OCP increased its supplies from the Middle East, Trinidad, and Tobago, and the US to offset an apparent drop in Russian ammonia supply.

Earlier this year, OCP also announced a deal with American Koch Industries whereby the American company would supply OCP with the necessary ammonia to reach production goals in exchange for partnering with the US company in a Morocco-based joint venture.

While OCP is significantly boosting its production and exports, most of its competitors are limiting or cutting their production due to high input costs, mainly linked to high gas prices. Despite the global need for fertilizer, traditional producers are enjoying the results of high fertilizer prices, while they reduce production, creating a global bottleneck in fertilizer supply.

Amid the international fertilizer supply bottleneck, OCP reported record profits this year. At the end of the first half of 2022, the company’s turnover totaled more than MAD 56 billion ($5.29 billion), a 72% year-on-year increase.

A recent report from American rating agency Fitch projects that OCP is expected to see further exceptional profits throughout 2023 partly due to China’s restrictions on fertilizer exports. Fitch forecasts that OCP’s profits would reach MAD 40 billion ($3.6 billion) in 2023, and approximately MAD 24 billion ($2.2 billion) in 2024.