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Morocco reaps money, clout from fertilizer provide surprise

RABAT: An international fertilizer provide surprise deepened by means of Russia’s Ukraine invasion has introduced growth instances for the North African phosphate superpower Morocco and earned the dominion new diplomatic capital. Rabat is the use of the leverage particularly within the decades-old combat over the disputed wilderness territory of Western Sahara, a former Spanish colony additionally claimed by means of Algeria-backed rebels, analysts say.

Morocco is ready to chalk up file revenues for a 2nd 12 months operating as farmers international scramble for phosphate, made scarce by means of sanctions in opposition to most sensible global manufacturer Russia and a Chinese language ban on exports. Phosphate is a key factor of man-made fertilizers, which might be necessary for business agriculture and world grain provides in spite of the long-term injury they inflict on soil and groundwater.

“It’s a strategic mineral for the longer term as it’s an important for world meals safety,” mentioned Abderrahim Handouf, an agricultural coverage professional. “As populations develop, fertilizers are one of the best technique to build up farm productiveness.” Consistent with Morocco’s state-owned phosphates company OCP, the dominion controls round 31 % of the world industry within the substance. The OCP, which holds a countrywide monopoly within the industry, is on target to file greater than 131 billion dirhams ($12.4 billion) in earnings this 12 months, up 56 % on 2021 — already a bumper 12 months.

‘Geopolitical tensions’

Even sooner than the beginning of the 12 months, costs have been edging upper as the arena emerged from the COVID pandemic and marketplace leaders like China imposed export restrictions, mentioned sector professional Mounir Halim. There was once additionally “robust call for from India, one of the crucial global’s greatest importers, which had exhausted its shares,” Halim informed AFP.

Then as Western powers imposed sanctions on Russia after its invasion of Ukraine, costs of fertilizer shot up. That made Morocco an important selection provider. The dominion’s exports of phosphates and their derivatives jumped by means of two thirds year-on-year within the first 9 months of 2022, consistent with the newest authentic figures.

Morocco has round 70 % of the arena’s phosphate reserves, and has been mining 4 websites since 1921, together with within the disputed Western Sahara. Morocco’s OCP has ramped up its manufacturing capability by means of an element of 4 since 2008, hitting 12 million heaps remaining 12 months, on the right track to succeed in 15 million by means of the tip of 2023. That makes it a significant participant in a world marketplace terrified of additional provide shocks.

The UN Meals and Agriculture Group warned in a document this 12 months that “fertilizer provides stay limited, shares are depleted and geopolitical tensions may spark further provide restrictions at quick understand.”

Phosphate international relations

The result’s that Morocco is playing no longer most effective an inflow of money, but additionally rising diplomatic muscle, in particular on Western Sahara. The dominion sees the huge stretch of wilderness as an integral a part of its territory, however the Polisario motion sponsored by means of Morocco’s arch-rival Algeria seeks independence there. Rabat has positioned the query on the middle of its international relations.

King Mohammed VI in August demanded that Morocco’s allies “explain” their stances at the factor, calling it “the prism wherein Morocco perspectives its world setting”. Consistent with L’Economiste, a Moroccan French-language newspaper, OCP has transform “the industrial arm of Moroccan international relations”. In September, Rabat recalled a cargo of fifty,000 heaps of fertilizer destined for Peru after Lima restored diplomatic family members with the Polisario’s self-proclaimed Sahrawi Arab Democratic Republic.

Sticks and carrots

However in addition to sticks, OCP gives carrots. The company has been increasing its presence throughout Africa, with branches in 16 nations, a fertilizer manufacturing unit in Nigeria and a deal signed in September to open some other one in Ethiopia. It has additionally set aside 4 million heaps of fertilizer “to enhance meals safety in Africa” subsequent 12 months, it mentioned.

This 12 months Morocco exported part one thousand million heaps of fertilizer to quite a lot of African nations, both without cost, as help or at preferential costs. Morocco is even having a look around the Atlantic for brand new markets.

In September it signed a handle Guatemala specializing in “fertilizers and farming”, consistent with the 2 nations’ international ministers. In the similar observation, Guatemala gave its backing to Morocco’s autonomy plan for the Western Sahara. However whilst OCP is a possible supply of world leverage at the factor, Morocco does no longer call for public enhance for its place with each contract signed.

“Morocco is the use of its financial palms in a realistic manner, no longer in a transactional manner,” mentioned world family members professional Tajeddine El Husseini. However, he added, financial ties will have “a political affect”. – AFP

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