Rabat – Morocco’s phosphate exports currently stand at MAD 53.5 billion ($5.2 Billion) at the end of the first nine months of 2023, a report from Office des Changes indicates.
The figure marks an annual slide of 38.1% from last year’s MAD 91.4 billion ($8.8 billion), the report explains. The drop in the value of exports comes at a time when fertilizer prices are stabilizing on the global market as concerns over supply wane.
Despite the market downturn, the Moroccan fertilizer manufacturer OCP is set to remain resilient according to American rating agency S&P Global Ratings’ latest report.
The report indicates that OCP Group has strong safety margins to cope with the challenging conditions in the international fertilizer market, according to an S&P report cited by Le360.
S&P argues that the OCP Group “should remain resilient in the face of difficult market conditions, maintaining indicators in line with the standalone rating of ‘BBB-‘ and the overall rating of ‘BB+’.”
The drop in fertilizer prices comes “in a context of cyclical decline compared to the record levels seen in 2022, as well as the weakness in demand and volumes this year,” S&P added.
The ratings agency highlighted that “the decrease in operating expenses, including key raw materials such as sulfur and ammonia, has only partially offset the pressure on prices and volumes.”Despite an unfavorable international market, S&P Ratings is optimistic about the performance of the OCP Group, expecting a gradual recovery in the second half of the current year.
According to their analysis, the company will record an adjusted EBITDA ranging from MAD 26 billion ($2.5 billion) to MAD 28 billion ($2.7 billion) in 2023 and MAD 40 billion ($3.9 billion) in 2024.
The forecasts are lower than those the rating agency expected in July 2023. The downward revision of the profits is taking into account “recovery in phosphate fertilizers during the second half, in a context of rising phosphate prices.”
The rating agency further explains that the expected drop in profitability is due to “overall favorable fertilizer availability, with stable crop prices and a historically low stock-to-use ratio supporting the agricultural economy.”
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