Morocco’s phosphate exports surge on global price rally
This article was first published by Oxford Economics Africa
According to data from the Office des Changes (ODC), export revenues from phosphates and derivatives were up by 45% in the first eight months of this year, compared with the same period last year.
The surge in export revenues has largely been price driven, as global phosphate prices have spiked amid tighter supplies and strong demand. On the supply side, the production of phosphates was hit by Hurricane Ida, which made landfall in the United States in late August 2021.
In March, the US also placed countervailing duties on phosphate imports from Morocco and Russia at the rates of 20% and 9%, respectively.
This resulted in US imports of the commodity from Morocco and Russia coming to a quick halt, which, coupled with supply chain issues in China, saw prices surge.
While the American import duties were not a great development for Moroccan and Russian phosphate exporters, recent media reports note that phosphate prices in the US have been so “relatively strong” that it was still financially viable for suppliers to import the commodity from Russia.
According to Callee Davis, an economist at Oxford Economics Africa, phosphate prices are expected to remain elevated over the short term, especially considering that China – the world’s largest phosphate exporter – banned phosphate exports until at least June 2022.
“The move is part of an attempt by Beijing to protect its domestic stock of the commodity to ensure sufficient supply for its booming grain industry. While the price surge bodes well for Morocco’s external position, it presents serious risks to global food security, says Davis.
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