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Morocco aims to become the world’s premier fertiliser producer

Fertilisers Reuters/Bernadett Szabo
Farmers in Europe are looking to Morocco for fertiliser following Western sanctions against Russia
  • Western sanctions on Russian trade are an opportunity for Morocco
  • Morocco is major producer of phosphates, used in fertiliser production
  • Country has reserve of potash, which Russia supplied prior to the war

Russia’s invasion of Ukraine has upset the global agricultural industry in more ways than one – but for Morocco, one of the world’s largest fertiliser producers, it has presented an opportunity.

Not only were Russia and Ukraine some of the world’s most important wheat and grain exporters, but they also played a central role in the global fertiliser industry.

Now Western trade with Russia has all but ceased across most industries, halting billions of dollars’ worth of trade in fertilisers. In 2021, the European Union imported €1.75 billion ($1.8 billion) worth of fertilisers from Russia alone.

This agricultural crisis provided an opportunity for Morocco, which, while smaller than Russia, is also a major fertiliser producer and has large reserves of the raw materials used to make it in all its forms.

Morocco exported €675 million worth of finished fertiliser products to the EU in 2021, the third highest behind Russia and Egypt, which exported €732 million to the EU last year.

Morocco is one of the world’s largest producers of phosphates, a raw material used in the production of many fertilisers, and it also produces other raw materials and manufactures the fertilisers themselves for export.

Ali Metwally, a London-based Mena economist and risk analyst at Infospectrum, told AGBI: “Due to the Russia-Ukraine war, companies and farmers in the industry have been paying price premiums for alternatively sourced fertiliser and are looking for cheaper alternatives to keep costs low.”

Morocco has been perfectly positioned to step in, and is now seeing competition for its products.

“EU and Latin American countries have been trying to secure sufficient inputs from Morocco to support their agriculture sector. Large quantities of phosphates and fertilisers are expected to be acquired in the coming three to six months,” Metwally said.

“A continuation of the war in 2023 will likely cause a further tightening of global fertiliser supplies and additional price increases due to sanctions imposed on Russia and Belarus, two top exporters.”

Aside from its large phosphate reserves, Morocco also has an important reserve of potash – or potassium chloride – another raw material key to the production of fertilisers.

Fertilisers
OCP, Moroccan phosphate mining company. Picture: Reuters

Globally around 70 million tonnes of potash fertilisers are produced every year. Russia and Belarus produced around 38 percent of this supply prior to the war.

Graham Clarke, chief executive officer of London-based mining company Emmerson PLC, said his company is in the late stages of establishing a modestly sized potash plant in Northern Morocco. It is planned to produce around 740,000 tonnes per year of potash.

Clarke said: “Potassium has been a tightly controlled market with few independent suppliers, and the customers typically buy direct from the producers.

“It has obviously been massively disrupted by the war,” he said, adding that the Ukraine invasion added to increased crop prices, increased the price of potash and financially benefitted existing suppliers.

He continued: “In terms of the potash world, the war has put more focus on the potential and importance of new supply coming online. Suddenly people have not got their secure supply from their traditional suppliers.”

He also touched on Morocco’s phosphate reserves, a different raw material used in other types of fertilisers, and the country’s expertise across the fertiliser market.

“Morocco is an international fertiliser hub, there’s no doubt about that. They have the majority of the world’s reserves of phosphate, they run a good business,” he said.

Many Moroccan firms, he explained, will use their potash to produce the fertiliser end-product and sell that on – not just to Europe, but also to Africa, which he said Morocco is targeting as a future export market. Clarke said his team is looking to export potash, rather than create fertilisers and export those products.

“I think a lot of people probably don’t understand the importance of the development of agriculture on the continent of Africa,” he said.

OCP, Morocco’s state-owned and largest phosphate producer, has a “vision to supply fertilisers to Africa, and Africa will, because of the amount of arable land available, become a food exporter to feed the world – it has to do that, otherwise food security issues will become a significant problem,” Clarke said.

Morocco’s geographic advantage means it can export readily from the coast and trade with both Africa and Europe readily, Clarke said.

Morocco has “close ties to the UK – our project is an example of how the UK and Morocco can work together, investment from the UK that benefits Morocco and Africa,” he added.